REALLY jumbo loans
The Northern California Home Builders Association plans to push to change the definition of a jumbo loan, The Mercury News reports today.
Right now that's anything above $417,000, the largest amount that mortgage financiers Freddie Mac and Fannie Mae will purchase. The homebuilders want to push the $417,000 "conforming" loan limit to $600,000 because the typical Bay Area home is so pricey. Jumbo loans, which have always come with a higher interest rate than conforming loans, have been even more expensive since the credit crunch hit this summer.
What does this have to do with us? The Mortgage Bankers Association told me that about 11 percent of loan applications in Maryland are for jumbo mortgages. Only seven states and the District of Columbia have higher shares.
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