To expand lending portfolios, JP Morgan Chase made the decision to pick up a loan portfolio from Citi. The deal is worth about $ 3.5 billion, and is a part of the $ 8 billion in troubled loans Citi has been selling to others. These loans were for multi-family and apartment buildings meaning JP Morgan Chase essentially has a guaranteed loans coming in.
Citi wants to sell its faxless loan portfolio
As a part of its rebuilding strategy, Citi has been selling off a wide range of loans and securities. Citi Holdings group has been able to receive most of this although other companies willing to get in have bought $ 19 billion worth of loans and securities. .
Credit loans bought by JP Morgan Chase
The portfolio that JP Morgan Chase has purchased from Citi consists of about 3,800 multi-family dwelling loans. Behind Fannie and Freddie is JP Morgan Chase in third place as a large mortgage lender. This adds to the $ 300 million in multi-family loans that JP Morgan Chase has “in the pipeline.”.
The increase in mortgage lending
The mortgage loan market has been slow although now applications are coming in a bit faster. New home loan applications in just the last week increased .6 percent. There are also more individuals not applying for loans although they may need them. Banks are getting a ton of pressure from legislators to lend, but banks do not want to. Banks really only want to give loans to applicants who are “credit worthy”. After years of economic downturn and job losses, there are fewer “credit-worthy” individuals than ever. Many are concerned there won’t be any change in lending although this purchase that JP Morgan Chase has been making on multi-family home loans has shifted things around in larger banks.
