On the other hand, if you need a jumbo note, you might very well be out of luck.
Thornburg Mortgage discovered on Monday evening that they couldn’t roll over their portfolio, because no one wants to buy paper with the word “mortgage” in it, even when it is very high quality paper.
My money is that by the end of the year it will be next to imposible to move anything but the best A paper.
I think the biggest problem is the need to sell all these mortgages within a few months of the closing so they can make more loans. Whatever happened to banks making money off the interest they were collecting from the mortgage ?
If I were a bank and a guy making 2 mil a year came in and asked for a 1 mil mortgage on a 2.8 mil home at 7.5% interest, I think I would give it to him.
What’s wrong with this picture ?