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worth reading – Signs of life in jumbo lending – Big banks compete with credit unions, community banks – BY MATT CARTER – Inman.com

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lots of good comments and color – Securing a Jumbo: No Small Task – BOB TEDESCHI -  EVEN as the federal government works to help loosen consumer credit, one home loan product is becoming more expensive and difficult to obtain: the nonconforming “jumbo” mortgage.  – NY Times  
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Securitization Games? – Banks reinvent securitisation to cut capital costs – By Patrick Jenkins in London -  Investment banks, including Goldman Sachs and Barclays Capital, are inventing schemes to reduce the capital cost of risky assets on banks’ balance sheets, in the latest sign that financial market innovation is far from dead.  The schemes, which Goldman insiders refer to as “insurance” and BarCap calls “smart securitisation”, use different mechanisms to achieve the same goal: cutting capital costs by up to half in some cases, at the same time as regulators are threatening to force banks to increase their capital requirements.  BarCap’s structures involve the pooling of assets from several clients into a secured financial product that can be sold to other investors and rated by a credit rating agency, potentially reducing the capital allocated against the assets by between 10 per cent and 50 per cent. – FT.com  
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Lenders avoid redoing loans, Fed concludes – Study cites lack of profit in aiding the distressed – By Jenifer B. McKim – Mortgage lenders don’t try to rework most home loans held by borrowers facing foreclosure because it would probably mean losing money, a study released yesterday by the Federal Reserve Bank of Boston concludes.  The Boston Fed’s findings suggest the Obama administration’s major effort to solve the foreclosure crisis by giving the lending industry $75 billion to rewrite delinquent loans to more affordable levels is not likely to work.  One of the study’s coauthors, Boston Fed senior economist Paul S. Willen, said the government would be better off giving the money directly to struggling borrowers to help them with their payments, rather than to lenders that are averse to working out the troubled loans. – Boston Globe

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Retired Teachers Seek Mortgage Servicer – By DIANA GOLOBAY – The California State Teachers’ Retirement System (CalSTRS) is hiring, and only qualified mortgage servicers need apply.  CalSTRS said late last week it is looking to hire a firm to act as master servicing agent of its steadily expanding home loan program, which for 25 years has provided its members with mortgage products at reasonable current market values, with options like down payment assistance and reverse mortgages available, according to a statement – housingwire

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What money doesn’t buy: Luxury home market stalls – By Adrian Sainz, AP Real Estate Writer – In the affluent village of Bronxville, N.Y., where residents of million-dollar homes have an easy half-hour commute into Manhattan, selling a house has become a whole lot harder.  Larry Brocchini put his four-bedroom Colonial on the market in late May, with a price tag of  $969,000. He and his wife, who want to move closer to their son’s private school, have hosted open houses and showed the home by private appointment about 10 times, but they have yet to receive a bid. – USA Today

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Protecting Borrowers from Themselves – … legislation that would create a new Consumer Financial Protection Agency (CFPA). … Wayne Abernathy, executive director of the American Bankers Association, predicts that this scenario will lead most big banks to stop offering alternative options to avoid risking a run-in with the CFPA. “You end up with two classes of financial institutions,” he says. On the one hand, you would have behemoth financial institutions that operate like utilities. “They get a steady return offering the standardized product, but they aren’t going to introduce anything new, … he says. On the other hand, you would have “small boutique financial-services firms that cater to the very wealthy. Everybody else gets driven out of the banking business.”… – National Review
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Big Deal? – Senior Lending Network Halts Applications, Looks For Buyer or Additional Capital – World Alliance Financial Corp., a reverse-mortgage lender that operates the Senior Lending Network announced today that it will no longer accept new loan applications, and will begin scaling back its operations effective immediately. – Reverse Mortgage Daily