JPMorgan Chase raising mortgage borrowing standards

[disneysteve]

https://www.usnews.com/news/top-news/articles/2020-04-11/exclusive-jpmorgan-chase-to-raise-mortgage-borrowing-standards-as-economic-outlook-darkens

Customers applying for a new mortgage will need a credit score of at least 700 and a down payment of at least 20%.

[Captain Save]

everyone's raising their standards.. FHA are no longer accepting folks in the 5's

[rennigade]

Thats not a bad thing, unfortunately for a lot of people, they arent getting a load through jpmorgan.

[bjl584]

All lenders are going to be forced into this I'm guessing.
After this is over I'd anticipate a surge in renters versus first time home buyers.
Might be a good environment to pick up some rental units at depressed prices if you want to dabble in it.

[ua_guy]

We bought a house for cash in the Minneapolis area last summer. I won't be bashful - I hate it here. We've been discussing what it would take to leave and head back home. We've been uncertain with this covid stuff. Decided to call up our realtor who facilitated the transaction last year. He says the entry market is quickly drying up - most of those people lost their jobs and can't get mortgages at all. The next tier above that is cooling--workers who haven't lost their jobs, but with the economy hard on the brakes, are seeing their employers begin to furlough, cut incentives, and sometimes pay, that's showing signs of slowdown too. The level above that is cruising along- people with substantial cash down, who are in a spot to complete an elective move, or who are making moves assisted by employers, etc. With the right setup, that market is still cooking.

Then that tidbit of news struck this morning about lenders. Lenders are tightening which will absolutely kill the entry market. But it may mean we still have some time.

Sunday he sent comps to us which support selling the place for almost $100k more than we bought it just a year ago. I just about blacked out. The guy knows his stuff and has the comps to support it. Problem is, we have no idea where we'd go or what we'd do. Probably rent? DH is committed to work here through the end of the fall.

Question is...do we dump the house and maybe come out ahead? Hunkering down wouldn't be the worst thing--but I really don't want to be stuck here for 10 years while the market recovers....

[cypher1]

Question is...do we dump the house and maybe come out ahead? Hunkering down wouldn't be the worst thing--but I really don't want to be stuck here for 10 years while the market recovers....

I was also in that similar dilemma a couple years ago, and decided to just rent my house in Savage (since i still can't decide if I'd get another house), while I rent a room 15 min away. If you know you're not going to stay in Minneapolis or at that house in the long run, and with all the uncertainty, I'd say dump it, take the cash and rent for the time being.

[Scallywag]

everyone's raising their standards.. FHA are no longer accepting folks in the 5's

In the 5s? Is that credit score in the 500s or people in their 50s?

https://www.usnews.com/news/top-news...utlook-darkens

Customers applying for a new mortgage will need a credit score of at least 700 and a down payment of at least 20%.

I personally see the 20% down as a bigger hurdle than anything else. 20% down is a couple of hundred thousand dollars for a decent CONDO in my neck of the woods and my boy NEEDS a yard. Just about solidifies my decision to MOVE to TX once my daughter goes off to college.

[~bs]

I mentioned it before, plenty people getting screwed on refinances. They checking your job status at the back end of the refinance, not just the front. If you lost hours or your job, you're out of luck on the refinance, despite collecting $$$$ for unemployment.

[Smallsteps]

It seems as if banks say these things but in short order things start to slide back to exceptions and loopholes.
Once the banks are fresh out of qualified borrowers they tweek something to increase their customer pool.

I honestly think many people would be in better shape banks had stuck with certain standards all along.

[Scallywag]

I mentioned it before, plenty people getting screwed on refinances. They checking your job status at the back end of the refinance, not just the front. If you lost hours or your job, you're out of luck on the refinance, despite collecting $$$$ for unemployment.

That's because unemployment is meant to be temporary and in this environment there is no guarantee you'll get another job, unfortunately.

It seems as if banks say these things but in short order things start to slide back to exceptions and loopholes.
Once the banks are fresh out of qualified borrowers they tweek something to increase their customer pool.

I honestly think many people would be in better shape banks had stuck with certain standards all along.

Banks did tighten lending criteria post the housing market crisis. However, 20% down isn't a reasonable expectation in most high cost areas and banks have to make loans at good interest rates to remain profitable.

[Captain Save]

In the 5s? Is that credit score in the 500s or people in their 50s?



I personally see the 20% down as a bigger hurdle than anything else. 20% down is a couple of hundred thousand dollars for a decent CONDO in my neck of the woods and my boy NEEDS a yard. Just about solidifies my decision to MOVE to TX once my daughter goes off to college.

yes you were able to get a house with credit score in the 5's though other aspects of your finances had to be stronger.. more reserves.. more down payment and of course the rate would be higher. now the new low is 620.. most lenders won't accept them that low but some will.

[~bs]

It seems as if banks say these things but in short order things start to slide back to exceptions and loopholes.
Once the banks are fresh out of qualified borrowers they tweek something to increase their customer pool.

I honestly think many people would be in better shape banks had stuck with certain standards all along.

Not going to happen for a while. banks are going to be super skittish. making loans now is risky, not just because of high unemployment, but because people can simply choose to stop making payments for a year.

[Smallsteps]

Not going to happen for a while. banks are going to be super skittish. making loans now is risky, not just because of high unemployment, but because people can simply choose to stop making payments for a year.

I just get tired of the roller-coaster lets ease up and give loans to iffy credit risks...... and next panic they release statements like " we are tightening the scores needed and DP requirements etc"

it would be more transparent if they also announced in good times " hey starting this weekend we are having anything goes days" buy one get one free/ happy hour / first fifty to text the word "risk" get a percentage point off......