Jumbo, Dumbo, Mumbo….

-WELCOME TO MY WEDNESDAY MIND- 

According to Wikipedia® the definition for a Jumbo Mortgage is: a loan amount above the industry-standard definition of conventional conforming loan limits.

And according to Dione Sage (that's just me) a Jumbo Mess is defined as too many people trying to pass rules to "stimulate" the economy and not focus on a long term solution.

I don't feel like my ears are too big and I can't fly like Dumbo but sometimes I feel like I am in a circus and that they changed the name to the Mortgage Industry. Dumbo had it easy though compared to us, he's never had a Jumbo loan request for a Stated Client before. This brings me to my thoughts about current Jumbo loans.  It may be too early to pass judgment on a bill/rule that has only been in effect for a short time however since I am entitled to my opinion.

In the early part of February Congress (aka the circus master) gave a slight indication that a part of the "Stimulus" package would make jumbo loans easier and less costly for folks. However much to some lenders dissatisfaction (mine too), since the rule that was made effective April 1^st, these types of loans are either non-existent or the rates are outrageous. I realize that the intention of it all was to help the lenders stimulate the economy by being able to do more loans over $417k but it is the guidelines and rates that are keeping jumbo loans from being attractive to a lot of borrowers/homeowners. I think we need the larger home loans to balance out the sale of so many foreclosures, short sales and ect... How often have we all heard the words "Declining Market" or "Housing Market Decline"?

Lets make the process just a little more like a circus trick and throw the stated income borrowers in to the mix because a lot of successful business owners and others make up a portion of the borrowers that "CAN" afford a high priced home. There is still 100% Financing for borrowers with a FICO of 580 or the customer whose Bankruptcy has been discharged for 2 years as of today BUT a borrower with an amazing FICO, Good Assets and Excellent history who just happens to need to go stated will get a loan with a higher than normal rate and have to put down a huge chunk of change for the down payment. I realize that is a whole other can of worms but I am just trying to toss my feelings of frustration out there.

The one GREAT thing about writing a blog is that I can vent as I pound away on my poor keyboard with a million thoughts running through my head and when I'm done I can go back to trying to find solutions for my clients and move on. For when you find that the door is locked, look for the open window.....

The GOOD NEWS, Freddie Mac (or Fred or Freddie, kidding) stated that they would buy up to $15 Billion of the jumbo loans so maybe there is hope. So Thanks Fred, we appreciate it...

Good Luck to you all and have a Great Wednesday!!!

P.S. I have read a lot on Jumbo Loans and Stated Income Loans today and I had to write something of my own to make me feel better....hmmm, it worked. Blogging on AR is great Therapy!