JPMorgan Leads Big Banks Out the Door of FHA (But Wells Fargo Hangs Tough!)

According to Kate Berry of American Banker, JPMorgan Chase has nearly stopped making home loans insured by the Federal Housing Administration.
Most large banks have curtailed FHA-backed loans in the past two years because of concerns about credit and legal risks, and JPMorgan’s 98% drop-off in that period puts an exclamation mark on the trend.
The $1.8 trillion-asset bank’s FHA market share was a mere 0.2% at June 30, compared with 12.2% just two years earlier, according to government data crunched by the American Enterprise Institute’s International Center on Housing Risk.
The rollback among big banks follows harsh penalties meted out by the Justice Department, which accused many banks of putting FHA on the hook for shoddy loans in the years leading up to the mortgage meltdown. Market shares at BB&T, Bank of America, Fifth Third Bancorp, Flagstar Bank, M&T Bank, Regions Financial and Wells Fargo have all declined in the past two years, the data shows.

This post was published at Wall Street Examiner on September 29, 2015.