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We admit it, we borrowed the ‘Ice Age’ line from The Great Loan Blog. Cute headline, serious issue: A problem with jumbos is a deal-breaker for real estate in California -- this state lives and dies on jumbo mortgages and small downpayments. So we want to hear your thoughts about what’s going on with jumbo mortgages ($417K and above). What we’re reading:

Paper Money: ‘...the vanishing of the affordable prime Jumbo loan is easily the most significant development for home prices that I have heard all year. Remember, the Jumbos have dried up for PRIME borrowers. ... And the cheap Jumbos are not coming back anytime soon.’

The Great Loan Blog: ‘The media has done a very poor job of relaying the collapse in the jumbo mortgage market. ... Lenders such as Indymac, Countrywide and WAMU have increased reserve requirements and stopped taking stated income for loans with less than 20% down. The interest rates for full doc jumbo loans in CA have risen by .50-.75% for the most prime credit worthy borrowers. ... As the guidelines continue to tighten, and the reality of the freeze in the jumbo market sets in you will see sellers drop their prices as we move toward the credit freeze of winter.’

Frequent Commenter Investorguy: ‘... lending literally stopped this week. ... There are hundreds of stories out there this week of fully-qualified borrowers who were told at closing that the lender couldn’t offer what they agreed to. Until corporations and people can borrow again, this thing will get worse.’

Your thoughts? Insights? Observations? We’d especially like to hear from real estate professionals on what’s going on in the market right now -- are deals still closing?
Hat tips: Westside Bubble, The Great Loan Blog.