Buyers will now be able to obtain a jumbo loan with an even lower credit score and down payment at Chase. According to an announcement from the bank on Wednesday, Chase, a U.S. consumer and commercial banking business of JPMorgan Chase & Co. is simplifying its jumbo loan product offerings by lowering FICO and down payment requirements on loans as much as $3 million.
According to the announcement, single-family homebuyers can now obtain jumbo loan with a FICO of 680 or higher and can put as little as 15 percent down. The previous requirements required single-family buyers to have a minimum FICO of 740 with a 20 percent down payment.
Wall Street Journal reporter Annamaria Andriotis noted that Chase followed a similar route taken by Bank of America Corp., Wells Fargo & Co., and other banks for requirements on jumbo mortgages. Regulatory costs and litigation risks are also causing some big banks to shy away from smaller loans.
“In some cases, our customers have been helped by other banks that have different guidelines,” said Sean Grzebin, head of retail mortgage lending at J.P. Morgan to the WSJ. “Some of this is [about] retaining customers we should have gotten and we hadn’t because of program restrictions.” The bank, run by Chairman and CEO James Dimon, said in July 2014 it was repositioning its mortgage strategy to focus on higher-end customers.
In April, the Mortgage Bankers Association (MBA) reported that jumbo loan applications saw significant increases mainly in the $417,000 to $625,000 range and also in the greater than $729,000 range. These results aligned with the MBA Mortgage Credit Availability Index, which revealed growth in jumbo product offerings.
"Generally, the home purchase market is slowly beginning to regain some footing as households have become confident in their income expectations and job prospects," the MBA said. "Entry level buyers continue to be impacted by factors such as tight credit, student loan debt, and regulatory challenges."
The bank also released its easy-to-understand guidelines for primary and second-home loans, investment properties, and cash-out finance loans that reflect its thorough analysis of market and borrower risk.
“Everyone in the home-buying process–from consumers to real estate agents and mortgage bankers–can more easily understand how we can help them close on a loan fast,” said Sean Grzebin, head of retail lending.
“We want to make sure homebuyers can easily understand the benefits of financing with Chase,” said Steve Hemperly, head of mortgage loan originations.