Last week we reported on the decline of conventional mortgage origination and especially jumbo mortgages. Our study focuses on what is happening in mortgage markets. We have some additional news explaining additional causes of the decline of the conventional jumbo mortgage market. Blame Jumbo size FHA mortgages!
Early this year, the Economic Stimulus Act of 2008 (Public Law 110-185) included an increase of FHA Mortgage loan amount limits. One result of this law was that many mortgages that may have been financed only through conventional mortgages (typically known as jumbo mortgages) became eligible for FHA mortgage insurance. The chart shows the monthly increases in the number of jumbo size (mortgages $417,000 or more) since 2006. The jumbo size FHA mortgages prior to the law (before February 2008) include mortgages on two, three, or four family residential units which allowed for higher mortgage loan limits cases.
An FHA mortgage for everybody!
Note!: Blogger image upload was not working for us today so we placed the chart on our web server.
Early this year, the Economic Stimulus Act of 2008 (Public Law 110-185) included an increase of FHA Mortgage loan amount limits. One result of this law was that many mortgages that may have been financed only through conventional mortgages (typically known as jumbo mortgages) became eligible for FHA mortgage insurance. The chart shows the monthly increases in the number of jumbo size (mortgages $417,000 or more) since 2006. The jumbo size FHA mortgages prior to the law (before February 2008) include mortgages on two, three, or four family residential units which allowed for higher mortgage loan limits cases.
An FHA mortgage for everybody!
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