Magazine article American Banker

JPM to Complete Its Departure from Wholesale Channel

Magazine article American Banker

JPM to Complete Its Departure from Wholesale Channel

Article excerpt

Byline: Maria Aspan

JPMorgan Chase & Co. said Tuesday that it would shut down what remains of its wholesale mortgage channel on Friday.

"We have decided to focus on loan originations through Chase bank branches, our consumer direct business, and other retail-originated loans," the company told employees in an e-mail, a copy of which was obtained by American Banker. "We are exiting the broker business that originates loans through brokers and, in the correspondent business, will no longer purchase loans originated by brokers." The company said it would continue to buy loans that correspondents originate directly.

Christine Holevas, a spokeswoman for the New York banking company, said it has decided to focus on retail originations because "customers like to work directly with their mortgage officers and we have found that default rates are significantly lower."

JPMorgan Chase's purchase of Washington Mutual Inc.'s banking operations last year also contributed to the decision to focus on direct originations, Ms. Holevas said. The purchase added more than 2,000 bank branches to JPMorgan Chase's network of 3,000. The company also has about 300 retail mortgage branches (Wamu had none at the time it was taken over.)

JPMorgan Chase began retreating from the wholesale channel in May, when it stopped offering subprime and home equity loans through brokers. Three months later, it also stopped offering nonagency jumbo mortgages through brokers. …

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