Even as the federal government works to help loosen consumer credit, one home loan product is becoming more expensive and difficult to obtain: the nonconforming “jumbo” mortgage. These mortgages exceed the conventional “conforming” loan limit of $729,750 set by Fannie Mae and Freddie Mac, the government-owned companies.Interest rates on jumbo mortgages have typically been higher than rates on conforming loans, in large part because they are considered riskier without a guarantee that Fannie Mae and Freddie Mac will buy them. But mortgage executives say the spread has been growing, forcing some borrowers to accept riskier adjustable-rate mortgages, or ARMs. Qualifying for jumbo loans has also become more difficult, they say.
By Bob Tedeschi, July 5, 2009 NYT

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