Jumbo Loans: Will the World End If They Go Away?

jumbo loans
jumbo loans

From the perspective of lenders, come this fall, writing jumbo mortgages without the federal government backing them is akin to walking a tightrope without a safety net. And the widespread prediction is that they just won't do it.

Some analysts predict that if the government no longer covers the risk of default, private lenders just won't write the loans -- resulting in only cash buyers being able to buy luxury homes -- and the high-end housing market will collapse.

Will the gilded sky really start falling? For most of America, this change is a big ho-hum.