Four Years Before Jumbo Securitizations Return?

It could take up to four years before the jumbo securitization market returns, according to research conducted by Bridge Capital Advantage of San Diego. Bridge Capital president Lucy Malone said the firm's belief is based on -- among other things -- conversations the company has had with the nation's top three lenders, Wells Fargo & Co., Bank of America, and JPMorgan Chase. Ms. Malone says she has been in the business for almost 30 years. "This was once a market that was over-served," she said. "Now it's under-served." Up until mid-year, Ms. Malone's firm was making jumbo and super-jumbo mortgages. Today, it makes what she calls "asset-based" loans that are collateralized not by a high-price home but a borrower's stock portfolio. She noted that only portfolio lenders are making jumbos and most require down payments of at least 40% and 12 months of reserves.