Toll Brothers earnings drop 85%

by John Wake on August 23, 2007

{ 3 comments… read them below or add one }

1 KG 08.25.07 at 6:43 am: It’s getting very tough to fund a jumbo mortgage over $417,000. And most of Toll Bros homes are well over this price.

This may be one of the first HB’s to go bankrupt.
2 John L. Wake - Realtor 08.25.07 at 9:28 am: I understand that if you have a good credit score and money down you can get a jumbo loan no problem.

The problem is the interest rate spread between conforming and jumbo which often was 0.25 points was as high as 1.0 points last week.

I can’t see that lasting. It seems like a great deal to buy loans based on lenders with good scores and down payments. I don’t see why they would need a 1.0 point spread. That spread should shrink fast.
3 KG 08.25.07 at 11:12 am: You’re incorrect in your assumption. Jumbo loans are much tougher as credit markets have constricted over the last month.

Think about it….mortgage servicing costs the same whether the loan is $200K or $500K. The mortgage companies are cash strapped and they don’t want to risk it with the higher priced loans. This is why the rates are now 1 point higher than conventional loans even though most buyers who need a jumbo loan typically have lower loan-to-value ratios and attractive credit profiles.