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.
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. People 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. 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” individuals 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 really help increase lending from either entity.
