“Jumbo” rates shoot up.

HSH Associates reports that rates for mortgages of more than $417,000 — so-called “jumbos”– have jumped to 7.84% from a high of only 6.87% in July. Meanwhile rates for conventional mortgages (those for amounts of less than $417,000 going to people with good down payment and credit) have actually gone down and are now at 6.69%.

This spread between jumbos and conventional mortgages is much higher than usual, about three times the average spread over the last five years. The reason for the high spread is that jumbos cannot be sold off to Fannie Mae or Freddie Mac and with all the turmoil in the mortgage market, it is harder to find an organization to take them on.

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