Major lender loosening requirements in hard-hit states

by Adam Smith11 Sep 2013

One of the nation's biggest lenders has eased standards in markets hit hard by the housing crash as housing recovers.

JPMorgan has lowered down payment requirements in Fla., Nev., Ari., and Mich., Bloomberg has reported. The bank said the states - some of the hardest-hit markets in the housing collapse - will "no longer be considered distressed states". Bloomberg said JPMorgan had also eased underwriting requirements for an FHA refinancing program.

The changes could be due to weakening originations for lenders. Wells Fargo revealed on Monday it expects to see its originations fall by $32bn in the third quarter. Similarly, NASDAQ has reported that JPMorgan Chase's originations are on pace to fall by 40% in the second half of 2013.

JPMorgan isn't the only lender loosening underwriting criteria in light of dwindling originations, Bloomberg claimed. In July, Wells Fargo began offering nonconforming loans with LTVs of 85%, up from 80%. However, the Mortgage Bankers Association's August Mortgage Credit Availability Index found that some credit availability was tightening, with decreases in the availability of interest-only loan features and loans with terms greater than 30 years.


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