NEW YORK CITY-JP Morgan Chase & Co. is lowering mortgage lending requirements in select markets that were battered by the housing downturn that are now seeing home price values rise sharply.
The bank has lowered some down payment requirements in Florida, Nevada, Arizona and Michigan noting that those states will “no longer be considered distressed states.” JP Morgan Chase also loosened underwriting requirements for borrowers in a Federal Housing Administration refinancing program, according to Blooomberg.com.
Banks are being forced to compete harder for home purchase customers as borrowing costs have risen from near-record lows that have subsequently caused refinancing to drop by 60%.
“Historically, you make underwriting as tough as possible when people are lined up at the door and when the lines go away, you start loosening underwriting to get people back,” says Guy Cecala, publisher of Inside Mortgage Finance. See story at Bloomberg.com.
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