Are the Jumbos Back?

Jumbo mortgages became more expensive and harder to come by as the nation's credit crisis deepened. That might be starting to change.
"Jumbo" refers to mortgages that are too large to be bought by Freddie Mac or Fannie Mae. The "conforming loan limit" for those government-backed entities is $417,000 in many parts of the country, but goes up to $729,750 in high-cost areas like ours.
Bank of America recently began advertising its jumbo program, offering 30-year fixed-rate jumbo mortgages with rates in the high-5% range.
Although these are lower jumbo rates than competitors Wells Fargo, JP Morgan Chase and Citibank, the others may follow soon, but for now they are in the mid-6% area....still a lot better than in October, when the average rate on a 30-year fixed-rate jumbo mortgage was 7.9%.
Lenders no longer have many institutional buyers for their jumbo loans, forcing them to keep the loans they write on their books. Banks held back when cash was tight, but banks have more money to lend lately, as consumers have taken money out of the stock market and put it into less volatile investments.
Also with all the assistance from the federal government, and record-low conforming rates inspiring people to refinance loans, banks have more liquidity.
Borrowers in the market for this kind of loan shouldn't expect a simple process, however. Mortgage shoppers will find differences in price and availability from lender to lender, and these rates may not be around for long.
Availability may be increasing, but requirements are still stiff. Bank of America jumbo loans, for example, require at least a 720 credit score and a 20% down payment (or 20% home equity on a refinancing)...and borrowers need to have at least six months worth of reserves in the bank. ING Direct requires 25% down.
Make sure to draw fair comparisons that consider mortgage fees and costs....and shop around!