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 are almost guaranteed pay day loan for JP Morgan Chase since they were for multi-family and apartment buildings.
Faxless loan portfolio being sold off by Citi
Citi is trying to rebuild and by doing so, have been selling loans and securities in the company. 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. In short, Citi is trying to shrink its business, while selling securities at close-to-value prices.
Credit loans bought by JP Morgan Chase
3,800 multi-family dwelling home loans were a part of the portfolio bought from Citi for JP Morgan Chase. Out of all mortgage lenders, JP Morgan Chase comes in third behind Fannie and Freddie. Multi-family loans were already at $ 300 million “in the pipeline” before this deal went through for JP Morgan Chase.
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. The number of individuals who need a loan but are not applying for one, though, also appears to be increasing. Banks don’t want to lend although legislators are pressuring them into it. The argument is that banks are doing every little thing 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. Larger banks have had things shifted around with this huge multi-family loan purchase from JP Morgan Chase, and nobody knows if it will help increase lending in banks or not.
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