Limited Jumbo Loan Access Perils CA Market

An important article in Market Watch this weekend focuses on the still-hurting jumbo loan market is beginning to impact the California housing market.  In parts of California (like Orange County) nearly 50% of all mortgages written are jumbo home loans (loan amounts north of $417,000).  In San Francisco more than 60% of loans are of the jumbo variety.  Lack of access to these loans has in part led to a huge drop off in home purchases in the state; and puts downward pressure on prices as home owners can no longer qualify for huge loan amounts. Data shows that the jumbo market, which traditionally has an interest rate spread above conforming rates of .25%, is currently about .75% above conforming rates.  Additionally, jumbo loan qualification has become more stringent, as