The Los Angeles Times reported yesterday that borrowers are facing more difficulty getting so-called "jumbo" mortgages -- those that are for loan amounts of more than $417,000, which is the "conforming" loan limit these days at Fannie Mae and Freddie Mac. The difficulty is that investors have abandoned the mortgage market, meaning that lenders have few options to sell off loans. What strikes me as bizzare is that a jumbo loan of $600,000 on a $1 million house has a loan-to-value ratio of 60 percent, which seemingly would be a much safer investment than a $417,000 loan on a $450,000 house, which has an LTV of 92.6 percent. And that's without regard to the creditworthiness of the borrower, which should be a fundamental basis of loan underwriting. The jumbo loan squeeze is particularly worrisome for California, where the median-priced home cost $586,000 in July. To qualify for a conforming loan, the buyer of that house would need a downpayment of $169,000. The LTV would be 29 percent.
Why does the One Ring, a Ring of Power, (cf: "The Lord of the Rings") make its wearer invisible? Because we touch on the edge of evil when we keep secrets and hide our true nature from our ourselves and others.
Here's a quick list of some of the books I've been reading this month:
- "Doomsday Book," Connie Willis
- "The Two-Minute Rule," Robert Crais (audiobook)
- "Pornified," Pamela Paul
- "Then We Came to the End," Joshua Ferris
- "The Fellowship of the Ring," J.R.R. Tolkien
- "Harry Potter and the Deathly Hallows," J.K. Rowling
- "Wyrd Sisters," Terry Pratchett
You've hinted. You've asked. You've suggested. And now, in response, here is my Official Blog. Welcome!