JP Morgan Chase decided to take on a loan portfolio from Citi to help with the goal of expanding lending portfolios. Citi has been selling $ 8 billion in troubled loans when this specific deal was worth $ 3.5 billion. These loans were for multi-family and apartment buildings meaning JP Morgan Chase essentially has a guaranteed payday loans coming in.
Citi selling off faxless loan portfolio
Citi is trying to rebuild and by doing so, are selling loans and securities within the company. $ 19 billion of these have been sold to other companies willing to buy when Citi Holdings group has received the majority. In short, Citi is trying to shrink its business, while selling securities at close-to-value prices.
JP Morgan Chase made sure to get the credit loans
JP Morgan Chase bought a portfolio including 3,800 multi-family home loans from Citi. Behind Fannie and Freddie is JP Morgan Chase in third place as a large mortgage lender. Multi-family loans were already at $ 300 million “in the pipeline” before this deal went through for JP Morgan Chase.
Mortgage lending going up
Mortgage applications are going up although it has been very slow. Applications for new home loans increased by about .6 percent last week. Individuals are in need of more loans but are avoiding applying for them still. Though legislators are putting pressure on banks to increase their lending, banks are fighting back. Banks are trying to get “credit-worthy” applicants before making a loan. ”Credit worthy” individuals are hard to find now and days with everything going on within the economy. 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.
