BA Rolls Jumbo

T&T has traditionally worked with many custom home builders in the Twin Cities area who build “Jumbo” homes. These are homes with a mortgage principal amount that exceeds Fannie Mae and Freddie Mac’s statutory limits, thereby requiring what’s commonly called a “jumbo loan.”

Last year’s collapse of the private mortgage bond market on Wall Street left home buyers, builders and refinancers who relied on jumbo financing with punitively high interest rates and huge down payments as their only option. Kenneth R. Harney in the Washington Post reports a change in this depressed and opressed segment, with Bank of America’s newly acquired and rebranded Countrywide Mortgage leading the way.

Bank of America, the country’s largest mortgage lender, is rolling out a large program to finance jumbo loans between roughly $730,000 and $1.5 million, with fixed 30-year rates starting in the upper 5 percent range. The loans will be available through the bank’s retail network and also through its Countrywide Home Loans subsidiary. After April 27, Countrywide will be rebranded — shedding the name it has had since 1969 — and morph into Bank of America Home Loans. Bank of America acquired Countrywide, once one of the biggest subprime lenders, last year. !–more–

This news, combined with the Fannie and Freddie bail out and incentives for the lower end of the mortgage spectrum is a good sign for buyers, sellers and builders alike.