“But what if the high end actually does worse than the rest of the market? Consider:
Jumbo Defaults. This past week, data showed that the delinquency rate for jumbo mortgages — those too big to qualify for backing by the government — at 6.9% of prime loans …”
“those too big to qualify for backing by the government”
meaning that after these high end houses default, the only potential buyers are people with cash to buy down the mortgage to govt backed size or with enough cashflow to afford the higher interest rate on a jumbo loan (assuming they can find a jumbo loan at all)
