Word: jumbos
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Among prime borrowers, those with jumbo mortgages - ones that have traditionally been for more than $417,000 - are seeing delinquencies accelerate the fastest. In January, 3.32% of such borrowers were behind on their payments, up from 1.75% in August. (That doesn't include the 1.1% of borrowers already in foreclosure.) Since Fannie Mae and Freddie Mac don't buy these large loans, it's been tougher for homeowners to refinance their way out of trouble - and the new housing-rescue package, which specifically excludes jumbo loans, won't do anything to change that dynamic...
...propping up the second group, Treasury won't subsidize loan modifications that reduce the interest rate below 2%. If you can't afford a 2% mortgage, in the eyes of the government, you can't afford your house. The plan also doesn't apply to investors or people with jumbo mortgages - those, historically, larger than $417,000. Loans for homes that would be more valuable to lenders if repossessed won't get modified...
...same limitations apply to this part of the plan. Only interest payments will be lower, not principal balances. Homeowners who owe more than 105% of the value of their house - as is often the case in the worst-hit areas of the country - will be ineligible. And holders of jumbo loans need not apply. Again, that might reflect a sense of fairness - why should we help people who stretched beyond their means to buy McMansions? - but it ignores the facts that the delinquency rate among jumbo loans is spiking and that a foreclosed property hurts the value of surrounding ones...
...Called "Dilution Effect": Today's vegetables might be larger, but if you think that means they contain more nutrients, you'd be wrong. Davis writes that jumbo-sized produce contains more "dry matter" than anything else, which dilutes mineral concentrations. In other words, when it comes to growing food, less is more. Scientific papers have cited one of the first reports of this effect, a 1981 study by W.M. Jarrell and R.B. Beverly in Advances in Agronomy, more than 180 times since its publication, "suggesting that the effect is widely regarded as common knowledge." (See pictures of fruit...
Kangaroo Route. Qantas is now flying its A380s from Sydney to London three times a week. They're 10% more fuel efficient than other jumbo jets and loaded with wi-fi, quieter engines and 17-in. monitors in the Marc Newson-designed first-class cabin. Ergonomically designed seats - complete with a small foot rest - improve the comfort level even in coach. It all makes the 22-hr. flight a little more bearable...