Good News, Bad News

"I have three borrowers who desperately need to refinance and they aren't going to be able to do it. They are going to lose their homes,"

It's awful people are going to be losing their homes at record rates. The good news is that John sells houses that were foreclosed on for the banks. His inventory continues to climb..

But the lending crackdown also is affecting more creditworthy borrowers who need to borrow more than $417,000 so they can buy or refinance homes. These so-called "jumbo" loans are common in expensive housing markets like California, where a mid-price home sold for $478,000 in July.

In the past few weeks, the jumbo rates have climbed 0.75 to 1.25 percentage points above the rates for mortgages below $417,000. That higher premium has put the financing out of reach for many borrowers.

The bad news is that many people who bought expensive homes thinking they would later flip them for a profit are going to get soaked. The good news is that the price of high-end housing will drop quite a bit I think.. enabling people who are making a lot of money to buy something absurdly nice..