Lenders are loosening the rules when it comes to giving out jumbo mortgages, or home loans that total $417,000 or higher. Traditionally, such loans are only offered to the most creditworthy of borrowers.
But now, jumbo mortgages are being approved for borrowers who likely would not have qualified for one in the past. Peter Grabel, a senior loan originator with Luxury Mortgage in Stamford, Conn., told the New York Times that lenders have become more willing to count capital gains from stock as income, if borrowers show a consistent pattern of cashing them in.
In New York, where home loans of $625,000 or higher fall into the jumbo category, lenders are helping borrowers finance buildings that are “nonwarrantable” or ineligible for backing by Fannie Mae.
Grabel says that the easing of the requirements for jumbo loans is “not wild and crazy.” He noted that some of the existing rules governing the loans might be “overly onerous.” [NYT] — Claire Moses