Jumbo Money Becoming Available?

Jumbo loans went the way of stated income/stated assets loans in recent years.  But they will come back, because there is a huge market for them, at least on a regional basis (e.g., the South Bay).  Jumbo rates are coming down of late, to the extent that they are available.  The tradeoff is that down payment reuirements are quite high. 

And NO, there are not meaningful jumbo stated income loans out there yet unless you're willing to put down 40-50%!  For more info: Jumbo mortgages now more affordable Amy Hoak's Home Economics - MarketWatch

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Signs of Life in 'Private Label' Mortgage-Backed Securities - WSJ.com

What will it take for jumbo mortgages to once again become widely available?  Jumbo mortgage investors will have to reappear, re-creating a market for the securitization and sale of these loans once lenders originate them.  Dipping a proverbial toe in the waters, a few such offerings are in the offing, revealing Signs of Life in 'Private Label' Mortgage-Backed Securities. - David

Castles for the Common Man - WSJ.com

For a little while longer, while rates remain low and jumbo mortgage credit remains tight, outstanding bargains will continue to be available at the upper end of the market for those with the cash to afford them, even in the Beach Cities!  - David

Southern California home prices rise 10% in February - latimes.com

Here's the regional info we want to see. Southern California home prices rise 10% in February!  Foreclosures are down in the area as well.

What's missing?  Stated income jumbo loan financing, which remains nonexistent in any real sense.  So self-employed purchasers looking to purchase larger, more expensive homes must come up with enormous down payments or work with a mortgage broker with access to nontraditional financing sources (ask me for a referral!). - David

Jumbo mortgage market is beginning to thaw - latimes.com

In a very well-timed article (see my immediate past blog post), the LA Times reports that the the Jumbo mortgage market is beginning to thaw.  There isn't much movement yet, and in fact the article quotes what all would-be jumbo mortgage borrowers already know, namely that "For now, the jumbo market remains limited to the volume of loans that banks are willing and able to keep on their books. But there is hope for a return to private outside funding." 

That private funding is exactly what's needed,

"Home prices rose for the seventh straight month in December..." - Builder Magazine

What does it mean when home prices rise in a single month?  Not much.  But in this article we learn that this is the 7th month in a row, which is very significant:

Home prices rise 0.3 percent in December - Builder Magazine

The S&P/Case-Shiller index tells us that home prices maxed out in May of 2006, nearly four years ago.  So housing declines continued for about three years, then leveled out nationwide in the middle of 2009. 

Does that signal a big runup soon?