“Due to the economic uncertainty, we are making temporary changes that will allow us to more closely focus on serving our existing customers,” Amy Bonitatibus, chief marketing officer for JPMorganChase’s home lending business, told Reuters in confirming the new borrowing measures.
JPMorgan, which was also the fourth-largest mortgage lender last year, will require any new mortgage applicants to make a 20 percent down payment and have a credit score of at least 700 starting on Tuesday, the firm confirmed to the news agency. The current average down payments are around 10 percent, Reuters reported.
The change in policy reflects uncertainty around the U.S. economy at large, as millions of Americans have filed for unemployment in the past several weeks as the CCP virus continues to spread. States have issued shelter-in-place or stay-at-home orders, forcing all non-essential businesses in some areas to close down.
The bank also said it will use more staff to handle a surge in mortgage refinance requests as more and more people lose their jobs.
The Mortgage Bankers Association (MBA) said that refinancing requests reached its highest level in around 10 years in March.
“The ongoing situation around the coronavirus led to further stress in the financial markets late last week, with unprecedented volatility and widening spreads. This drove mortgage rates back up to their highest levels since mid-February and led to a 10 percent decrease in refinance applications. However, refinance activity remains very high. Excluding the spike two weeks ago, the index remained at its highest level since October 2012, and refinancing accounted for almost 75 percent of all applications,” Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said in a news release.