Nope this isn’t a good phenomenon. Once again this is a result of Fed intervention. The Fed is buying mortgage backed securities as part of the stimulus package

Nope this isn’t a good phenomenon. Once again this is a result of Fed intervention. The Fed is buying mortgage backed securities as part of the stimulus package that exclude jumbo loans, so banks are being effectively saved from bad conventional loans on their books because they can sell it to the government but can’t sell jumbo loans that are usually taken by more credit worthy and wealthier borrowers. This is creating a distortion in the mortgage market that isn’t rational.