Are jumbo mortgage loans back? According to Saturday’s edition of the Wall Street Journal, yes.
Jumbo mortgage lenders originated $18 billion in loans in second quarter 2010, the Journal reported. That’s a 20 percent increase from the first quarter (but still below 2007 levels, according to Inside Mortgage Finance Publications Inc.).
Jumbo mortgages are those that are too big to be bought by government-backed agencies such as Fannie Mae and Freddie Mac. Generally, they exceed $417,000.
Real Estate Center Chief Economist Dr. Mark Dotzour described the return of the jumbo loan as “truly good news.”
“The fact that the spread between conventional loans and jumbos has narrowed to very low levels means that borrowing costs for higher priced homes is declining,” Dotzour said. “This will encourage home sales in the higher price ranges of Texas homes.”
According to Inside Mortgage Finance, J.P. Morgan Chase & Co.’s Chase Home Lending unit increased its jumbo mortgage volume by 146.2 percent in the first six months of this year over the same period last year. Wells Fargo & Co. increased by 47.5 percent, and PHH Corp. of Mount Laurel, N.J., increased by 64.6 percent.