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JP Morgan CHASE exits the wholesale business

By
Mortgage and Lending with Funky Quail Vintage

I cannot STAND gloom & doom, however, we just were notified by JP Morgan Chase, that they are exiting the Wholesale business, and all loans have to be closed up by March 16th.

They will no longer be accepting locks and/or new registrations after January 16th.

This does NOT affect their USDA Rural Housing Division.

Our Account Executive just stated they are not going to be working brokers, or with anyone from a Correspondent position, unless it is a bank, or credit union.

In the end, this hurts competition, as well as the customer!  Their reason for this can be found on their webpage, but basically they are stating that their broker created business is not performing as well as their retail branch developed business.   I dont understand HOW that can be, seeing as how we as brokers, bankers..etc...get a list of stipulations put forth by the funder.  (in this case Chase).  We meet the items required to close on that list, and then close the loan.  If the loan is not performing, they only have themselves to blame, as the conditions they continually put on a loan, include additional items to what FANNIE MAE and Freddie Mac consider not necessary!  For example, I have been asked in my automated approval for only 1 paycheck stub, but get a requirement from the underwriter for 2.  This also goes for bank statements, as well as w2's as well!

Anyway, I though everyone should know!  This will create opportunity for Countrywide, Wells Fargo, and others to capture the #1 wholesale lenders piece of the pie!

I am sure there is MUCH more to this story that what we will find to be on the news, or be told through any media channels!  Again, blame will be shifted to the wrong people or entity!

Darin

One SOurce Mortgage, LLC

Wisconsin

Donna Shuman
Florida Wholesale Realty Corp - Oviedo, FL
REALTOR - Marketing for Richard Shuman - www.SKIPtheBULL.com

I'm sure a lot more banks will do the same thing - some should have years ago!

Jan 13, 2009 08:00 AM
Gerry Suarez Jr.
New American Funding NMLS 6606 - Orlando, FL
FL Mortgage Guru

D-man,

I honestly think it will spread from here. Funny how you mention the two lenders you did. Remember 1 of them was bought out by the first big bank to kick brokers aside! The other one will be suffering Wachovia's ill fated World Savings buy and we will see how they feel once that's all over.

But I agree that will open up opportunities for others to gain market share. The adjustments will continue, let's all flow with them and gain market share too!

Gerry Suarez, Jr.

Your FHA Loan Pro!

Jan 13, 2009 11:40 AM
Ron Withers ----Retired Mortgage Professional
Kissimmee, FL

Darin,

More to come!  Several months ago when Chase announced their reorganization of their Regional Centers and cutbacks I had a feeling that it was just a matter of time before they exited wholesale.

Jan 30, 2009 07:58 PM
Darin Osenberg
Funky Quail Vintage - Nashville, TN

Hi Ron,

Thanks for leaving a comment!  Yes, I only put out this post as information really, as I was quite surprised at the timing of it!  We actually got an email prior to the Account Executives even knowing!  Really poor taste!  I just closed up one of my last 3 loans with them, and I will be blogging about it in the near future!  (probably the next 6 days)...I will be giving my 20 year opinion of WHY they are ACTUALLY exiting the wholesale business in that blog! 

Suffice it to say that they blame it on how well the broker generated loans performed, vs, the retail originated loans.   Well, that may be true for two big reasons:

1.  Retail didnt HAVE some of the low doc, no doc, express products that wholesale did!

2.  If you compared equally over the past 12 months...(which would be most fair), I will bet you , that they performed the same or better!  Reason:  You have to give blood and a urine sample now with them, to get a loan approved!!!!   As you know, we are given a list of requirements to meet.  If we meet those and they close the loan, why is the broker to blame??  Anyway, i hope everyon reading this, will enjoy my blog next week!

Best, and thanks! 

btw-  just got solicited by a new company trying to take marketshare here in the midwest, called Wintrust Mortgage...good ae, so we will have to see!

Thanks.   Darin

Feb 04, 2009 07:29 AM