Jumbo mortgage lending is beginning to show nascent signs of a recovery, or at least a stabilization of sorts.

In the first quarter, all residential lenders funded $16.3 billion in jumbo loans, a 2% decline from the same period last year. The slight drop came during a quarter when all residential fundings fell dramatically, by 32%.

The top five jumbo originators had a mixed performance with some showing large gains, while others suffered declines.

Bank of America Corp., which ranked first in the sector, saw its jumbo production fall 26%, to $3.28 billion. Wells Fargo & Co., the No. 2 producer, was flat with $1.98 billion.

But PHH Corp.'s mortgage arm had strong growth (up 102%) as did JPMorgan Chase & Co. (up 108%).

Citigroup Inc.'s mortgage unit, which has been scaling back its involvement in residential finance for 18 months, experienced a 56% decline.

There are some new entrants to the jumbo business as well. This month, Bank of Internet USA launched a jumbo program in California, hiring Jerry Konzen, a former top executive at Thornburg Mortgage, to oversee the effort.

In April Redwood Trust came to market with a $238 million jumbo loan securitization, the first deal of its kind in almost two years. It is believed that once jumbo securitizations return in earnest, lending volume in these non-government-guaranteed loans will bloom, or at least improve dramatically.

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