jerry p

Jumbo Mortgage Risk Will Topple the Teetering GSEs

It's funny to see that some people are still comparing past default rates to the loans of the past few years. Alt-A used to be very safe loans until the lenders threw all standards out the window. Subprime used to default at under 5% and is now defaulting at nearly 20%. One jumbo loans default equals three or more average conforming loans defaulting. Now throw on a housing bubble where prices will drop 20-30 percent with jumbo defaults and you have a recipe for disaster