Jumbo borrowers are not the issue when it comes to defaults, their default rates are still extremely low. That being the case, where is the bailout??? It’s merely allowing Fannie Mae and Freddie Mac to take reasonable risks and operate more as free market corporations. I don’t see this as a bail out but as a way to restore confidence to the market and bring jumbo rates back to a reasonable premium. Currently certain regions (non-contiguous areas of the US such as Alaska, Hawaii, etc.) get Fannie Mae and Freddie Mac loan limits that are 150% of what the rest of us get?
Making the connection that you are paying for MB’s hummer or flipper’s MB is a stretch by any means.
To give due disclosure I am looking for a mortgage right now and would greatly benefit if the conforming loan limits were raised.
