JP Morgan Chase purchases multi-family loans from Citi
As a part of its goal of expanding its lending portfolio, JP Morgan Chase has purchased 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. The purchased loans are practically payday loans for JP Morgan Chase, as they are loans for apartment and multi-family buildings.
Citi selling off no fax 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 the recipient of some of these loans, while about $19 billion worth of products have been sold to other companies. In short, Citi is trying to shrink its business, while selling securities at close-to-value prices.
JP Morgan Chase purchases credit loans
The portfolio that JP Morgan Chase has purchased from Citi includes about 3,800 multi-family dwelling loans. With this purchase and others, JP Morgan Chase has become the third-largest mortgage lender behind Fannie Mae and Freddie Mac. This adds to the $300 million in multi-family loans that JP Morgan Chase has “in the pipeline.”
The increase in mortgage lending
Applications for new mortgages have been slowly but surely ticking up. Applications for new home loans increased by about .6 percent last week. The number of people who need a loan but are not applying for one, though, also appears to be rising. Though legislators are putting pressure on banks to increase their lending, banks are fighting back. The argument is that banks are doing everything they can to offer loans to “credit-worthy” applicants. After years of economic downturn and job losses, there are fewer “credit-worthy” people than ever. JP Morgan Chase’s purchase of multi-family home loans is helping shift assets around large banks, but there is debate as to whether it will actually help increase lending from either entity.