The coronavirus caused banks to pull back on lending, and one niche that was severely impacted was Boston luxury condo buyers, with less than 20% down payment. In early March, you could have borrowed $2,500,000 with 10% down, and by the end of March, the max was down to $850,000.
The availability of jumbo mortgages plunged by 37 percent in March, more than double the drop in the overall home-loan market, according to the Mortgage Bankers Association.
The problem for Boston Luxury condo buyers
The global pandemic has flipped the mortgage market upside down, turning the industry’s most-valued customers into a risky bet. One of the biggest contractions has been in loans that require minimal documentation to prove a borrower’s ability to repay and that can’t be sold to or insured by government entities. Such loans — often referred to as non-QM mortgages — are popular with self-employed borrowers who don’t get W-2 forms detailing their wages.
Wells Fargo retreats on luxury real estate loans
In recent weeks, the lender, the nation’s fourth-largest bank by assets, has halted purchases from other mortgage banks and limited refinancings of jumbos to customers who currently have at least $250,000 parked at the bank, an executive said.
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