“There’s also more access to jumbo lenders, because the guidelines are loosening a bit, giving access to a wider range of people," says John Walsh from Milford, CT's Total Mortgage Services, which has seen a big jump in jumbo originations this year.
Source: Robyn Freidman in the WSJ
California-based Foothill Ranch has seen jumbo volume increase 17% in H1 vs. the same period last year - this while the median income of borrowers fell 4%, and the company eased its debt-to-income ratio. Earlier this month, the company began offering 40-year jumbos with interest-only for 10 years.
Typically conservative Redwood Trust (NYSE:RWT) recently launched Redwood Choice which allows for lower FICO scores (as low as 661 vs. 720 typically) and LTV ratios (20% down was the previous norm, but now 10% will do).
Redwood President Chris Abate says one of the reasons is that credit performance has been excellent, with the company yet to incur a loss on any jumbo mortgage since the financial crisis.