Lenders are easing criteria for jumbo borrowers, The New York Times has reported. Lenders are now approving jumbo loans for borrowers who don't meet rules for income documentation or minimum FICO scores, but can compensate for the shortfalls in other ways, such as capital gains from stock granted as compensation or a track record of work within the same industry.
But Luxury Mortgages senior loan originator Peter Grabel told the Times the loosening of jumbo loan criteria was "not wild and crazy", saying lenders were "just sort of unwinding the things that might have been overly onerous".
Grabel said, for example, that lenders typically require two years of tax returns to document the income of self-employed borrowers, but may consider borrowers who have owned their business for a shorter period but have worked in the same industry and have significant funds in reserve.
GuardHill Financial Corporation mortgage specialist Jordan Roth told the Times that lenders were looking for ways to drum up business following a drop in refis and purchases.
“So lenders are having to get a little bit more creative. They’re taking good, strong loans with quality borrowers who have compensating factors to overcome a challenge in credit, income or whatever,” he said.
An easing in underwriting guidelines for jumbo loans is "not wild and crazy", according to a senior loan originator.