“Rising defaults by affluent homeowners are raising the specter of another cloud over banks and investors, which could get stuck with thousands of expensive homes.
About 6.9% of prime “jumbo” loans were at least 90 days delinquent in December, according to LPS Applied Analytics, a mortgage-data research firm. The rate was up sharply from 2.6% a year earlier. In comparison, delinquencies of non-jumbo prime loans that qualify for backing by government agencies climbed to 2.1% from 0.8% in December 2007.
Jumbo mortgages average about $750,000 and can run as high as $5 million or more. More borrowers with such loans are being hit by layoffs that are spreading through practically every sector and pay level of the U.S. economy.”
This is reflective of two things: The abdication of lending standards during the 2002-07 period, and the ongoing economic contraction.
Check out all the jumbo loans going bad in Florida! Much worse than the rest of the nation — what sort of lending standards were going on amongst all of those builder-financed condos along the inter-coastal?
Geez, what junk!
Banks and Investors Face ‘Jumbo’ Threat
WSJ, JANUARY 28, 2009