According to Market Watch J.P. Morgan Chase & Co. is slackening its endorsing criteria for major mortgages, as competition to grab a bigger share of the high-end housing market among lenders rapidly rise.
The nation's largest bank, J.P. Morgan Chase & Co., plans to release an announcement as soon as Tuesday that it is lowering the minimum credit score and down payment it will requires for mortgages as great as $3 million.
The move of the big New York firm is similar to the steps of firms like the Bank of America Corp, Wells Fargo & Co., and other banks for requirements on big mortgages, for example those that exceed $417,000 in most parts of the country or $625,500 in high-priced markets. At the same time, the big banks are veering away from smaller loans where regulatory and litigation risks are higher.
Following the financial crisis, a recovery in the economy including the mortgage market has faced a lot of challenges, but the jumbo market, which is prevalent with wealthy borrowers, has rebounded along with sales of more expensive homes. In the second quarter, overall jumbo beginnings went up to an eight-year high that is at $93 billion, up by 58 percent from a year ago, according to an initial estimate from an industry newsletter Inside Mortgage Finance.
Furthermore, by dollar volume, big mortgages given out by moneylenders last year accounted for about 20 percent of all first-lien mortgages, used for the purpose of purchasing or refinancing a home, according to Inside Mortgage Finance. That is up from 5.5% in the year 2009. By record, the last time jumbo mortgages accounted for a larger share was way back in 2005.
J.P. Morgan Chase & Co (NYSE: JPM) is one of the oldest financial institutions in the United States with its head office located in New York City, New York.
