JPMorgan Chase has decided to step on the bandwagon of megalenders refusing to participate in FHA "streamline" refinancings that are outside of their current servicing portfolios, National Mortgage News has learned.
"We are focusing our FHA streamline refinance efforts on customers we service today," JPMorgan spokeswoman Amy Bonitatibus said.
Large servicers, the likes of Wells Fargo & Co. and JPMorgan, are already experiencing high refinancing volumes because of continued ultra-low rates.
Among GNMA issuers (FHA lenders) Wells and JPM rank first and second, respectively, according to figures compiled by National Mortgage News and the Quarterly Data Report. The two have a combined market share of about 47% based on issuance.
PHH, which ranks sixth nationwide, also will not handle loans that are not presently being serviced by the firm.
"They are willing to do FHA streamline refinancings to accommodate their own customers," according to Tom Cronin, managing director at The Collingwood Group. "But they aren't interested in refinancing these legacy FHA loans unless they already own the risk."
While borrowers must be current to qualify for the special FHA streamline refinancing program, many could have low credit scores or these pre-June 2009 mortgages could be underwater.
By refinancing their existing customers, banks can improve their risk exposure by lowering the borrower's interest rate, Cronin said.
