According to bloomberg Jumbo Mortgage Defaults are rising at their fastest pace in over 17 years.
Jumbo-loan defaults rise at fastest pace in 17 years
NEW YORK — Owners of luxury houses are falling behind on mortgage payments at the fastest pace in 17 years.
About 2.57 percent of prime borrowers who took out jumbo loans last year were at least 60 days delinquent within 10 months, according to LPS Applied Analytics, a mortgage data service in Jacksonville, Fla.
That big a proportion at that speed hasn’t been recorded since at least 1992, when LPS began tracking the market. It took 19 months for as large a proportion of borrowers from 2007 to be so overdue.
The jump in late payments on jumbo loans, although still lower than the 20 percent delinquency rate in subprime mortgages, signals that the borrowers with the most money and the best credit are hurting as the U.S. recession deepens in its second year. It also means these loans will be even more difficult to obtain and more expensive to pay off.
President Obama’s homeowner aid proposal has no provision to help jumbo-mortgage borrowers.
About 1.92 percent of homeowners with 2008 mortgages backed by Fannie Mae and Freddie Mac fell at least 60 days behind, LPS Applied Analytics said. Jumbo loans are bigger than what the two government-controlled agencies buy or guarantee.
Currently the Fannie-Freddie cap is $417,000 in most places and up to $729,750 in areas with higher home prices.