JPMorgan takes another step back from mortgage lending to focus on refis

JPMorgan Chase is stepping further away from mortgage lending as it focuses on the wave of refinancings.

In its second major move this week, the bank announced Thursday it will no longer accept home equity line of credit applications due to the uncertainty in the economy brought on by the coronavirus, according to Housing Wire.

JPMorgan is the fourth largest mortgage lender in the country.

A spokesperson for Chase Home Lending did not say how long the “temporary pause” would last. Anyone already with a Chase home equity line of credit can continue to draw money against their homes.

Earlier this week, the bank tightened its home lending standards, requiring all mortgage borrowers to have a credit score of at least 700 and a 20 percent down payment.

Thursday’s move will free up employees to focus on the wave of refinancing applications the bank has received since mortgage rates dropped to near record lows late last month, the bank said. JPMorgan already moved some of its HELOC staff over to handle refinancings as well.

New customers can pull equity from their properties with a cash-out refinancing, which essentially replaces a mortgage with a new one worth more than a given property. That type of financing has become increasingly popular. Last year, JPMorgan recorded twice as many cash-out refinances than it did HELOCs, according to Housing Wire. [HousingWire] — Dennis Lynch