File this one under rumor: A new player in the origination market (two years in the business) has originated $100 million in loans that are not eligible for sale to Fannie Mae, Freddie Mac, or coverage under FHA. (Some include jumbos.) The money came from private equity investors. We have yet to confirm the story and it could be one of those mortgage ‘Urban Legends’ that spring up from time to time. But the most interesting thing about the tale is the dollar amount: $100 million. We’ve talked to a few lenders, advisors, and investment bankers who have said $100 million is about as high as PE firms are willing to commit to the nonprime space right now. When will PE firms loosen up the purse strings? Answer: when they feel a viable secondary market has emerged for nonprime mortgages, including jumbos. Godot that?
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