Fitch Ratings has downgraded jumbo mortgage securities once again. Jumbo mortgage rates are not bad with 30 year fixed jumbo mortgage rates as low as 5.75% at par. The real problem in the jumbo mortgage market is delinquencies. Jumbo mortgages are going 60 days late faster than regular loans. When you’re talking jumbo defaults your talking about risk in the jumbo home markets. Risk causes lender’s to raise rates to compensate and be more stringent with underwriting guidelines, lending on fewer properties. It’s a heck of a snowball effect that could send higher end home markets plummeting in value. Just days ago reports were released prediciting far more foreclosures in 2010 then in record setting 2009. All in all the future just doesn’t look bright for the jumbo mortgage market and higher end home markets.
This video talks about rising delinquencies, where the housing market is headed, buyer confidence and what the latest numbers by Fitch say about the jumbo mortgage market. This video explains how California, New York and Florida make up a large percentage of delinquent jumbo loans. U.S. jumbo prime market delinquencies have risen a great deal.