Register reporter Jeff Collins reports …
The percentage of jumbo home loans declined in late August, both in Orange County and across Southern California, DataQuick Information Systems reported today.
Jumbo loans, or mortgages greater than the “conforming” loan limit of $417,000, accounted for 54 percent of all home-purchase financing in Orange County in August, down from 58.6 percent of the loans in July, DataQuick reported. Jumbos accounted for 59.4 percent of home-purchase loans from January through July.
The decline was even more pronounced when comparing the last five business days of the last two months: Jumbos represented 49.6 percent of home-purchase loans in the last week of August, compared to 58.6 percent of loans in the last five business days of July.
In Southern California as a whole, jumbos made up 39.7 percent of home loans after Aug. 17, the research firm reported, compared to 43.4 percent from Aug. 1-17.
Most Orange County home buyers have relied on jumbo loans because of high home prices. For example, someone buying a median-priced Orange County home must borrow at least $500,000, even when making a 20 percent down payment.
Conforming loans have been easier to get recently because they qualify for resale to government-affiliated lending giants Fannie Mae and Freddie Mac.
Industry officials reported that lenders made it harder to get jumbo loans in recent weeks, either by changing guidelines or discontinuing them. Rates also increased for jumbos recently, now averaging more than a percentage point above rates for conforming loans.
Some brokers say consumers can save by getting two smaller loans to avoid getting one large jumbo loan.
Ouch! First OC loses hundreds of six figure earners to the mortgage broker and realtor disintegration crisis, now there aren’t even available loans for the high-earners left standing.
What does that mean if you refinanced your home to yank equity out of your residence, in order to make the brilliant “investment” in two or three luxury condominiums (planning to sell to those same vanishing high-end buyers)?
In the end, it could well be that the real difference between “subprime” borrowers and many “sophisticated prime borrowers” will be that subprime folks only experience one foreclosure, whereas many prime borrowers will be doing two or three at a time?
PEOPLE ARE GOING TO FALL HARD. GET READY. IT’S GOING TO GET UGLY OUT THERE. FUNNY HOW THE TOP 5 CHEAPEST PLACES TO LIVE HAVE THE TOP 5 RECORD OF FORECLOSURES.
ITS A CRIME THESE PEOPLE WERE TAKIN ADVANTAGE OF.