JPMorgan Chase’s new customized Pinterest boards are meant to simulate a dream renovation, with only the smallest dose of reality.
The boards, generated by filling out a brief quiz, are stocked full of fantastical photos of luxury residences alongside DIY home-building advice and a smorgasbord of Chase financing options to pay for it all.
The marketing initiative is the result of a partnership between Chase Home Lending, Pinterest and the bank’s ongoing celebrity spokesmen, home renovation reality TV stars Jonathan and Drew Scott — better known as The Property Brothers. It’s part of the bank’s concerted effort to target first-time millennial homebuyers in need of cash for renovations.
At a recent event in New York City, Chase’s CEO Mike Weinbach explained the bank’s thinking: Millennials were behind about 30 percent of purchase loans this year with the vast majority of those transactions — to the tune of about 90 percent — being for existing homes.
In a later interview, Sean Grzebin, managing director and head of Consumer Originations at Chase Home Lending, said the partnership was launching amid “the most competitive market I’ve seen in 22 years.”
As interest rates rise, the refinancing market is shrinking too. The Mortgage Bankers Association’s chief economist told the Washington Post in June that traditional lenders may not have been profitable as of the end of 2018’s first quarter. Over the summer, Wells Fargo laid off 650 employees from its retail and mortgage servicing businesses, and, in October, JPMorgan Chase’s layoffs hit 400 employees from its consumer mortgage lending business.
The answer, Chase’s home lending group hopes, lies in easing lending rules and pinners (the nickname for Pinterest users).
Grzebin said Chase customers “can get into a house with less than 3 percent down,” as opposed to the oft-repeated conventional wisdom that homeownership requires a 20 percent downpayment, and the initiative with Pinterest is just one more way of getting the banks offerings in front of new, “younger” customers.
According to Chase’s internal stats, about 17,000 people have used the quiz in the first 60 days and the top lending selection for financing has been a home equity line of credit (HELOCs). Cash-out refinancing was the second.
The number of U.S. homeowners tapping into both types of home-equity loans jumped notably early in the year.
Some financial advisers have called American’s reticence to borrow against their homes “a long-memory issue,” but Chase’s Grzebin doesn’t agree. “People are not nervous about it,” he said. But they do seem to need some reassurance, which is where celebrities like The Property Brothers come in.
Celebrities from Paris Hilton to boxer Floyd Mayweather have lent their star power to financial products as varied as home improvement loans to exchange-traded funds (ETF) in recent years. And earlier this year, Goldman Sachs appointed former “Bachelorette” JoJo Fletcher while State Street Global Advisors brought on actress Elizabeth Banks.
During the New York City event, Jonathan Scott recalled Chase customers who’ve come up to him on the street since the brothers starting working with the bank.
“My favorite part of the whole partnership,” is telling starstruck fans “I know your pin,” he joked.