Jumbo loans aren’t extinct; they still roam the earth, just in lesser numbers. They are fully documented loans, so you actually have to prove you can pay them back. But with fewer lenders lending jumbo loans, tighter guidelines, fewer people who actually qualify, and fewer people with equity from selling current homes to move up, there are fewer of these loans being recorded.
Take a look at these numbers on luxury Boston condos that sold for $2,000,000 and up.
Mach 1, 2008 – August 31, 2008 – 73 condos sold.
March 1, 2009 – August 31, 2009 – 30 condos sold.
So, the summary on super jumbos is:
Fewer lenders taking less risk.
Tougher underwriting standards.
Less move up equity.
Few truly qualified borrowers.
Not as many buyers stretching their reach.