Chase, the U.S. consumer and commercial banking business of JPMorgan Chase (JPM), changed the requirements on its jumbo loan products to better match its peers in the market.
The bank announced Wednesday morning that it is loosening its jumbo loan product requirements and lowering FICO and down payment requirements for those loans.
A buyer with a FICO of 680 or higher looking to purchase a single-family property can now put as little as 15% down.
Single-family homebuyers were previously required to have a minimum FICO of 740 with 20% down payment.
At the time, Wells Fargo and other banks were loosening mortgage criteria that were still tight by historical standards.
Now, Wells Fargo said in a comment, "Wells Fargo will make jumbo loans to borrowers with credit scores as low as 680 if they have at least a 20% down payment, and will make loans with LTVs as high as 89.99% but have higher credit score requirements. Since requirements vary based on a number of factors, customers should call a Wells Fargo Home Mortgage Consultant to discuss their specific needs and circumstances."
Jumbo loan demand has been steadily growing, with the Mortgage Bankers Association reporting in April that applications for some jumbo loan sizes increased in 2014, mainly in the $417,000 to $625,000 range and in the greater than $729,000 range.
This growth in jumbos was consistent with credit availability trends captured in the MBA’s Mortgage Credit Availability Index.
Chase adjusted its jumbo loan requirements to make the homebuying process easier as part of a firm-wide simplification process.
The bank rolled out easy-to-understand guidelines for primary and second-home loans, investment properties and cash-out finance loans.
“We want to make sure homebuyers can easily understand the benefits of financing with Chase,” said Steve Hemperly, head of mortgage loan originations.