Even with good credit, potential homebuyers seeking jumbo mortgages—loan amounts exceeding Freddie Mac and Fannie Mae limits for conventional home loans—are coming up empty-handed. According to the Wall Street Journal, ING is one of the few lenders increasing jumbo loan originations, but the company is requiring a 30% down payment, up from 20% last year. These requirements are frustrating many borrowers as they are forced to raid their retirement savings in order to come up with steeper down payment requirements.

first tuesday take: High-end homes will drop to “all cash” values without the availability of jumbo loans. This is good for the wealthy buyer. The absence of fixed rate jumbo mortgages will trigger agents to come up with creative alternatives to jumbo financing. Carryback financing will most likely come to the rescue, allowing wealthy sellers to more readily sell to wealthy buyers. If carryback financing is not an option for a seller and the buyer is unable to sell his current residence, agents will need to consider an exchange of homes with one of the parties trading down into a lesser valued home.

Re: “Jumbo Mortgages, Jumbo Headaches” from the Wall Street Journal