Major bank is looking to reduce its FHA volume

JP Morgan Chase is reducing the number of loans it makes to less than perfect credit borrowers.  Due to rising costs associated with origination, risks and possible foreclosure costs they have determined that FHA loans are not in the banks best interest.  FHA loans have done through a number of changes over the last few years and during this time they have become more expensive to originate; especially for the borrower.   “The cost to take a customer through the foreclosure process is just astronomical now,” Kevin Watters, JPMorgan’ head of residential mortgage banking, told Reuters.

This is a continuing trend where large banks are exiting certain markets to improve their bottom line.