Archive for February 8th, 2010
People who hold jumbo loans on pricey U.S. properties continued to struggle in January as more Americans lose their jobs and property values have plummeted, according to a report released Monday.
Jumbo loans were popular — and often necessary to afford homes in pricey areas like Southern California — during the heady years of the boom.
Jumbo loans are generally defined as being above certain conforming limits set by mortgage titans Freddie Mac and Fannie Mae. (The conforming limit for single-family homes was $417,000 from 2006 to 2008 but was increased temporarily by federal lawmakers in early 2008 to $729,750 in certain high-cost areas, including Los Angeles County.)
Overall, delinquencies of 60 days or more on prime jumbo loans that were packaged into securities and sold to investors rose to 9.6% in January, up from 9.2% in December and 3.7% a year earlier, according to the report by the Fitch Ratings agency in New York.
California, which comprises 44% of the market, saw its delinquency rate rise to 11.3% in January from 10.8% in December and 4.1% a year earlier.
“The deterioration in performance is really the combination of two things going on: rising unemployment that took place throughout 2009 as well as our estimate that about a third of all jumbo loans that are current are underwater in terms of the value, so [borrowers] owe more on their properties than they are worth,” Fitch managing director Vincent Barberio said. “As more of these loans become delinquent, they ultimately will come into foreclosure.”
Prime jumbo loan delinquencies began to rise in the second quarter of 2007, but accelerated in 2009 and nearly tripled over the course of the year, Fitch said. The five states with the highest volume of prime jumbo loans outstanding are California, New York, Florida, Virginia and New Jersey.
– Alejandro Lazo
Dusan Tatomirovic found a steal when he bought a foreclosed condo just north of Monterey, Calif., last April for $130,000.
For a young couple starting out in Tokyo, this apartment was gutted and brought up to a very contemporary, streamlined design. We love the results, starting from this hot pink work area concealed behind crisp white doors:
A multi-part series, today we are going to show you how to breathe new life into an old pair of speakers. It is a commonly held belief that the newer speakers and audio equipment get, the better they are. This is not always the case and sometimes, even when your speakers are damaged, there is sonic power left in them that modern equipment can’t match…
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