Will The Government Start Buying Jumbos?
There are some good reasons why they should. One of the great points the article makes is that people who are buying lower priced homes can do that with less than perfect credit and very little down when in the Jumbo market you have to have large down payments and perfect credit. The one thing you need to keep in mind is that the more expensive homes don’t sell as quickly. That is where some of the risk comes into play, the marketability.
“The National Association of Realtors is lobbying the government to do just that, by purchasing mortgage-backed securities that consist of jumbos, which are too large to qualify for government backing from Fannie Mae or Freddie Mac. They’re pushing for the government to scoop up the securities through the Term Asset-Backed Securities Loan Facility, or TALF.”