By Southern California homebuyers need jumbo loans, but are they still being financed?
For those of us in the Southland, jumbo loans are a reality of life. (Jumbo loans are loans that exceed the definition of conventional, conforming loan limits set by Fannie Mae and Freddie Mac, $417,000 in 2006 or $625,000 in Alaska and Hawaii.) Many of our buyers wouldn’t be able to afford the price tag of a home here without them. For example, in September, Dataquick says the median price of a home in the Southland was $462,00.
There’s a lot of speculation out there as to what is going to happen with the jumbo moan market for the remainder of the year. Many want to be positive, but others point out that we’ve not hit rock bottom yet.
According to DataQuick, the number of homes in SoCal purchased with jumbo loans in September dropped by half compared to August. Read more here. Of course, that’s due to the fallout in the mortage market that took place this summer. September was really the first month we saw the direct effect of that. Many think those loans will pick up toward the end of the year, though.
Edward Lazear, chairman of the White House Council of Economic Advisors also recently told C-Span that “We expect [the jump loan market] to take off in the near future.” This is after a two to three week “stopping” period in mid-summer. Read more here.
And, the Fed’s chief told congress that regulators would take steps to curb the fallout related to the mortgage craziness of this summer.
Of course, about 2 million adjustable-rate mortgages are still on track to reset to higher rates at the end of the year, so what happens after that is anyone’s guess.
Here in LA, there are still lenders who continue to fund jumbo loans. My best advice to agents is that you treat every case individually when it comes to getting your buyer financed. We can’t assume a buyer will or will not get a loan based on the market in general. Our job as REALTORS™ is to get on the phone and do our best for that one person so that we can move the sale forward.
Here’s a lender we’ve been working with for jumbo loans. Maybe they can be of help to others. If you’re a lender or are working with one that’s originating jumbo loans, let us know.
THE JEFF HOFFMAN GROUP
JEFF HOFFMAN
(818) 343-3599 ext. 461
