5 housing trends for the next 3 months

The jumbo mortgage won't get cheaper
3 of 7

The secondary market for jumbo mortgages froze in August 2007. Jumbo rates have been high since then.

Without a secondary market, jumbos have been done the old-fashioned way: by banks that keep the loans on their books. Banks turn on and turn off jumbo availability like water from a faucet, says Brian Koss, executive vice president of Mortgage Network, a lender based in Danvers, Mass.

He adds that the underwriting standards for jumbos are inconsistent, so it's hard to predict whether a given application will be approved.

In late April, a bundle of 255 jumbo loans was securitized, under rapt attention from the mortgage world. If this securitization was the first of many, then jumbo rates are likely to narrow their gap above conforming rates. But it won't happen overnight.




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