JP Morgan Chase’s Take on Housing Recovery

by on JP Morgan Chase Foreclosures

JP Morgan Chase Building

If you agree with just about everyone in the country – with the obvious exception of big banks – then you believe that a large part of the real estate market crash rests on the shoulders of big banks like JPMorgan Chase. In fact, this is such a well-known belief that these lenders have faced multiple foreclosure settlement agreements as a result of their unethical actions and inactions. At the end of the day, these lenders basically walked away from the situation with a small price to pay despite their key role in the housing market crash.

Along with blaming big banks for the crash, many people are asking if these lenders not only contributed to the crash but have also slowed down real estate market recovery. Apparently this accusation struck a nerve with an economist at JPMorgan Chase, who then proceeded to blame small banks for the slow recovery.

Strict Lending Standards

One of the key areas in which these lenders are being blamed for slowing down housing recovery revolves around the incredibly strict lending standards that banks put into place after the real estate market crash. The Federal Reserve Bank of Dallas is responsible for making this accusation and adamantly believes that big banks like JPMorgan Chase need to be “broken up".

JP Morgan Chase Speaks Out

Apparently those at JP Morgan Chase were not thrilled to hear the accusation that the lenders have delayed real estate market progress. Recently Michael Cembalest, a JPMorgan Chase economist, spoke out saying that JPMorgan Chase and other large banks are doing their part and more, while small banks are failing to uphold their part.

According to Cembalest, larger banks are providing more credit than smaller banks in relation to their size and “capability.” However, even though the numbers show a “boom” last year in mortgages in comparison to the recent years, 90% was due to refinancing, not new home loans. Furthermore, Cembalest compares unfair measures in his “analysis” in his determination to pass the blame to smaller banks in an effort to divert the attention from JPMorgan Chase and other mortgage giants.

JP Morgan Chase Expands

Although JPMorgan Chase has been caught up in foreclose settlement agreements and arguing over whether they are to blame for slow real estate market recovery, they apparently still have time to expand. Specifically, as other banks are pulling back, JPMorgan Chase is actively expanding its portfolio.

At the end of the day, those involved in real estate are attempting to determine not only why the real estate market crash occurred, but also who is to blame for the slow recovery. While most blame big banks like JPMorgan Chase, these banks seem to pass the buck to their smaller counterparts. Either way, recovery is definitely underway and although it is occurring slower than desired, at least we are finally making real estate market progress.

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