Mortgage lenders funded roughly $33.2 billion of Jumbo mortgages during the fourth quarter, a handsome 57% gain from the same period a year earlier, according to survey figures compiled by National Mortgage News and the Quarterly Data Report.
Moreover, the production gain was 20 points higher than the 30% overall improvement enjoyed by all residential lenders during the quarter. (The 4Q10 was the industry's best of the year in terms of new originations with $544 billion of product funded.)
But the strong showing by Jumbo lenders did not translate into any jumbo MBS issued during the quarter. In fact, no public Jumbo bonds were issued in 4Q10 and only two deals have come to market over the past year – both by Redwood Trust of Mill Valley, Calif. (Redwood's last deal came to market a few weeks ago.)
Many depositories that fund the product continue to place these loans – many of which are 'interest only' mortgages – on their books, market participants told NMN.
The survey found that the three top funders of Jumbos during the period were: Wells Fargo with $5.3 billion originated (up 180% compared to 4Q09), Chase ($4.1 billion/up 75%), and Bank of America ($3.6 billion/down 13%.)