Just got a phone call from DH saying the above may not be accurate...I'm off to call WF.

/T

Well, I just called a local WF mortgage office & was unable to get a quote on a $525K fixed rate mortgage. Everything was going great until I gave the requested loan amount...then, was told, "Uh, may I have your phone number & I'll call you back." Haven't heard from him since. CNBC is still saying that WF has gone to 8% effectively removing them from the jumbo market. They are the #2 mortgage lender in the country.

/T

American Home Mortgage just laid off 91% of their workforce (a 7000-person payroll was just cut to only 750 people keeing their jobs, for now).

National City is supending originations of stated-income loans, Wachovia has stopped making Alt-A's through brokers, and Accredited Home Lenders says its viability going forward is uncertain if a pending merger falls through.

In an effort to stem a panic in the mortgage-backed securities market, Countrywide says it has "plenty of funds available to weather the industry's troubles".

Here is a link that might be useful: Link to wall street journal article (probably need subscription)

Wells Fargo is not the only one taking a step back. The spreads are all over the place right now. The market is just nuts right now. The 10 year is bouncing around, swaps have gone nuts the last few weeks.... It has to settle down sooner or later, doesn't it?

Oh, and the article confirmed what you were saying about Wells Fargo - loans that just last week were 6 and 7/8 are now available for 8.0%.

It makes me glad a potential purchaser of my house would not need to come up with more than $417K to buy it. For those of you above that cutoff, it could be a very very unfortunate time to have to sell.

Man, this stuff is really going to hurt an already difficult market. I've been guessing since about May that the problems with subprime were going to move up the ladder. I guess the jumbo situation proves that. On a personal note I guess my DH should have listened to me when I told him we should refi in March. He wanted to wait a few months until we had paid off a large lingering bill. I guess we'll have to wait until we have enough saved to bring the loan under the jumbo limit or someone raises the limit???? Wells Fargo has kept our loan for 6 years. I wonder if they'll try to sell it off now?

mfbenson: "Oh, and the article confirmed what you were saying about Wells Fargo - loans that just last week were 6 and 7/8 are now available for 8.0%."

Yeah, but the artcile also had this statement: "A Wells spokesman said rates are lower on loans made directly by the bank than on those through brokers." If you go to the Wells Fargo website you'll note that they are quoting 7% for a fixed rate jumbo loan - which is only 1/8% higher than last week. So it looks like it is the brokers who are SOL, not the actual customers.

^^^^
Fair enough, but an eighth percent on a $500,000 loan is still another $625 a year in interest. Your point about the brokers getting squeezed is also applicable to what Wachovia is doing.

No matter how you cut it, it will be more difficult for buyers to find financing for jumbo loans, which in turn makes it not as good a time to sell a house in that end of the market.

My optimism about the housing market turning around before the end of 2007 is fading...

Hmm. That won't help the market a bit. I've been following the news about the bridge collapse in Minneapolis. An employee at Wells Fargo was one of those involved. I wonder what he thinks of all of this.

"Peter Siddons was on his commute home north when he heard "crunching" and saw the bridge start to roll and then crumple, he told the Star Tribune. "It kept collapsing, down, down, down until it got to me."

His car dropped with the bridge but stopped when his car rolled into the car in front of him. He got out of his car, jumped over the crevice between the highway lanes and crawled up the steeply tilted section of broken bridge and jumped to the ground.

"I thought I was dead," said the senior vice president at Wells Fargo Home Mortgage. "Honestly, I honestly did. I thought it was over."

The availability of jumbo mortagages will not disappear, ever..What may happen, as noted above, some banks may make jumbo's available only thru themselves and not brokers...I would bet that the jumbo market is in the majority of mortgages on both coasts

qdognj, assuming a mortgage of 80% LTV...your comment would infer that the majority of homes are $520K, or greater. That, quite simply, is not true.

In my zipcode, 96 homes are listed at $550K or under. There are 63 homes listed over $550K.

In my old zipcode (NH), there are 296 homes listed for sale under $550K & only 22 over $550K.

In a notoriously expensive NH market area, there are 159 homes under $550K & only 74 over $550K.

Just for grins, I searched the Fairfield, CT zipcode which is considered very affluent. There are 109 homes listed under $550K & just 59 over.

I think your comment is out of touch with 'real' America...certainly New England.

Tricia

Found this...

Prime jumbo loans accounted for about 12% of the mortgages granted last year, according to Inside Mortgage Finance.

/t

Here is a link that might be useful: It's down the page....

WF didn't sell my jumbo, which was closed on 18 months ago. It's a 10 year ARM. Even though it won't be a jumbo when I go to refinance, I won't be refinancing with WF. They were horrible to deal with, truly terrible and incompetent.

WF is a huge percentage of the jumbo market, around 20% last I read. I would think getting out of that market would be damaging for them (but I guess not if they are doing it). Wouldn't they lose a good percentage of those high net worth banking accounts, investment accounts, etc?

tricia: "In a notoriously expensive NH market area, there are 159 homes under $550K & only 74 over $550K. Just for grins, I searched the Fairfield, CT zipcode which is considered very affluent. There are 109 homes listed under $550K & just 59 over. I think your comment is out of touch with 'real' America...certainly New England."

Well, Tricia, as long as we're using anecdotal evidence to try to prove (or disprove) a point, in my zip code (20815), there are 49 SFH listed on the MLS. All 49 are above $550k. In fact, the majority (25 of 49) are at $1.4m or higher.

Now, I don't know whether qdogni would win his bet or not, but I just posted this to show that you can't just rely on anecdotal evidence one way or the other.

My comment was based on the fact the coasts have seen such terrific price increases, and many homes are over 550k, where i moved from in Bergen County, the average selling price for a home that needed help, was 600k...So perhaps my view is somewhat jaded, but as bethesdaman points out, i can show eveidence of my comment and just as fast be disproven.Home values are all local...

triciae, in CT, I would imagine that there are more affluent towns to surveyÂ..such as DarienÂ..where most of the basic "nothing-to write-home-about" 1500 SF 50 years old or so starter homes, often with dated kitchens and no central air are all listed at almost a million...and higher.

Isn't Greenwich even more affluent?

In our small (less than 5,000 people) town in rural central NJ...we have three small developments currently being built; 2500Â..to 3500 SF.... at .75 to 1.75 acresÂÂstart 690K...to 800K...before upgrades.

Not counting the one house here or two homes there being built that are priced at just shy of 2 mil......and higher...

It seems so out of character with what is drummed into our collective heads about the tanked RE market...I keep thinking that these developers know something that we don't know...

Interesting, in our Puget Sound zip 98110 there are 49 properties listed at 550000 or below (including condos/townhouses and a moble home) and 210 properties listed at more than $550000.

>>WF is a huge percentage of the jumbo market, around 20% last I read. I would think getting out of that market would be damaging for them (but I guess not if they are doing it). Wouldn't they lose a good percentage of those high net worth banking accounts, investment accounts, etc?
The answer is no. They are still charging 18%+ on credit cards, enormous fees for "extras" on checking (its competitor WaMu, for instance, admits it can offer "free" checking because they make so much $$$ off overdraft charges), spreads on corporate loans and investment accounts, etc. In comparison, being a mortgage lender is just part of their 'soup to nuts' market emphasis as a large financial institution.

It isn't their sole bread-and-butter. Sheer inertia prevents most people from moving their checking and investment accounts around, and financial institutions know they can count on it.

Do I bank with WF? Yup. They have the biggest ATM network in my area, and I live and die on those - I HATE going into a bank. I also have a large number of auto payments set up, which would be a nightmare to try to unravel and move to another bank.

Do I have my mortgage with them? Nope, better rates were available from WaMu.

Do I have my investment portfolio with them? Are you kidding? Give our family's portfolio to a bank's second-rate investment division? No way! For example, BofA took over US Capital, where some of my (much richer) friends had their portfolios managed. They are EXTREMELY unhappy more than a year later, feel they have really lost the small-firm personal touch, and most of them are starting to look around for other advisors. The notion of keeping all your financial affairs with one bank is passe these days to anyone with financial sophistication. It's like remodeling a kitchen - go with the vendor in each segment that does it better than the competition and has the features you want.

The jumbo loan market is actually smaller than we think. It covers a fairly narrow range of homes from the $500K to around $2M or so. RE agents say that homes in the $3M+ range tend to be cash sales; such buyers don't need mortgages.

"Prime jumbo loans accounted for about 12% of the mortgages granted last year, according to Inside Mortgage Finance."

Funny, that doesn't quite jibe with this quote from today's Wall Street Journal:

"They account for about 16% of the total mortgage market, according to Inside Mortgage Finance, a trade publication, and are especially prevalent in California, New Jersey, New York City, Washington, D.C., and other locales with high home costs."

I suspect the 12% figure was a little out of date. I'm somewhat surprised that its actually only 16%, but then again, the national average home value is (only!) about $250,000.

Anyhow, I forsee a shortage of buyers in that market, and sellers fighting over the cash buyers. And, of course, sooner or later Congress will authorize Fannie Mae to underwrite jumbo loans for a larger limit.

Here is a link that might be useful: WSJ article (probably need subscription)

As is said RE market is local, my Southern California market is jumbo. The lowest price SFR in my zip is $799K, which is land value. What does this mean to well qualified borrowers? Time will tell. I am currently shopping for RE, may go for a multi family loan, not an SFR. I do have a large down, so I don't think I'll get caught in this crunch.