JP Morgage Chase isn’t looking at mortgages very fondly these days. In fact in a 50 page report from their CEO we get the feeling they’d rather not be doing them at all.
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I appreciate your shows and do enjoy them but they only point out the problems. Why not be the innovators that direct us to solve the problems. Spell out who we need to speak to or write letters to fix the problems. Go back to the '60's and start a grass root program to rid the ills of the industry .
When WAMU bought North American Mortgage Corp that was a huge deal. Shortly there after the rumor mill was running crazy and wild over who was buying who and taking down some of the biggest lenders. Rumors flew that Chase was going to buy Wamu. We were told repeatedly that was never going to happen…Chase has just eaten it in the shorts with all the garbage that swallowed up from Wamu. Wamu was giving loans if you had a pulse. It was insane….why does it sound like we are headed back down that road again…I mean Obama says in one sentence FHA is going to help more people buy a home and then in the next breath he says the CFPB is going to continue to prosecute and fine anybody who sneezes wrong. So really who is going to lend the poorest of the poor with the CFPB hanging by the gallows.
FYI, chase forbids there mortgage LO’s from watching your show. I used to work as a mortgage LO with them years back. One could get fired for watching. but I would like to know what the rest of Jamie’s letter said. after he pointed out the costs and negative things associated with doing mortgage loans he was about to explain why he wanted to still stay in it. I wonder why you guys cut off the letter at that point?? “Here’s Why:” the rest of this letter may contradict your point about chase wanting to minimize there mortgage business. there intent may be just to streamline.
Now there's an idea! Let's not only hear the problem, but discover new ways and ideas to make change for the good. Possibly open a forum that invite key players of the industry to cut-out, repeal, or amend old hindering laws that do not work. As well as provide direction for brave trail blazers willing to do the legwork. Provide reasonable financial support through the donations of all those concerned in seeing those plans implemented. Or something like that…?
Nothing earthshattering in the remainder of the piece. Chase will continue to do mortgages, focusing on metro areas and leaving the small communities in the dust.
“The mortgage business can be volatile and has experienced increasingly lower returns as new regulations add both sizable costs and higher capital requirements. In addition, it is not just the cost of the new rules in origination and servicing, it is the enormous complexity of those new requirements that can lead to problems and errors. It is now virtually impossible not to make some mistakes – and as you know, the price for making an error is very high. So why do we want to stay in this business? Here’s why:
•Mortgages are important to our customers. For most of our customers, their home is the single largest purchase they will make in their lifetime. More than that, it is an emotional purchase – it is where they are getting their start, raising a family or maybe spending their retirement years. As a bank that wants to build lifelong relationships with its customers, we want to be there for them at life’s most critical junctures. Mortgages are important to our customers, and we still believe that we have the brand and scale to build a higherquality and less volatile mortgage business.
•Originations. We reduced our product set from 37 to 15, we will complete the rollout of a new originations system, and we will continue to leverage digital channels to make the application process easier for our customers and more efficient for us. In addition, we have dramatically reduced Federal Housing Administration (FHA) originations. Currently, it simply is too costly and too risky to originate these kinds of mortgages. Part of the risk comes from the penalties that the government charges if you make a mistake – and part of the risk is because these types of mortgages default frequently. And in the new world, the cost of default servicing is extraordinarily high.
•Servicing. If we had our druthers, we would never service a defaulted mortgage again. We do not want to be in the business of foreclosure because it is exceedingly painful for our customers, and it is difficult, costly and painful to us and our reputation. In part, by making fewer FHA loans, we have helped reduce our foreclosure inventory by more than 80%, and we are negotiating arrangements with Fannie Mae and Freddie Mac to have any delinquent mortgages insured by them be serviced by them.
•Community Reinvestment Act and Fair Lending. Finally, while making fewer FHA loans can make it more difficult to meet our Community Reinvestment Act and Fair Lending obligations, we believe we have solutions in place to responsibly meet these obligations – both the more subjective requirements and the quantitative components – without unduly jeopardizing our company.”
And FHA can suck it. They abandoned their customers that have the 3.5% down payment by crazy MIP terms.
I have to say – I am so happy that someone hasn't posted here to reach out to their congressmen to pass yet another bill. With the divided country the last thing we need is congress passing bills at the federal level that only appeal to half the populace. If we the people would clammor for government to REPEAL bills maybe we would have less government control, more laissez-faire markets, and ultimately more freedom. Remember – the only entity you are FORCED to do business with is the government.