Tough Slog for Buyers Seeking Jumbo Mortgages

From this weekend’s Times, a story about the difficulties of obtaining a nonconforming jumbo loan in the post-meltdown market: “‘Two years ago these loans could be accommodated very easily, but today the requirements to get those loans are much more stringent,’ said David Adamo, the chief executive of Luxury Mortgage in Stamford, Conn. Mr. Adamo likened the current mortgage market to a barbell, with pockets of availability for borrowers at both ends of the income spectrum but less for those in between. Those with annual incomes up to about $250,000 have access to mortgages insured by the Federal Housing Administration, while the very affluent can obtain loans from private banking institutions. For borrowers with household incomes between $250,000 and $500,000, however, mortgages are not as easy to get, Mr. Adamo said. ‘These people are living in places where starter homes might be $1 million,’ he said, ‘and it’s really affecting them.’ Fannie Mae and Freddie Mac will accept only loans below $729,500 in the highest-cost markets like New York City and northern New Jersey. For mortgages larger than that, mortgage brokers and bankers must find other investors who want to take the loans.” The story talks about how borrowers have to go to community banks like Astoria Federal and Hudson City Savings Bank to get jumbos, and that qualifying for the loans at these institutions has become much more difficult.
Securing a Jumbo: No Small Task [NY Times]