JPMorgan shifts scores of workers to mortgages to handle boom
JPMorgan Chase is shifting workers to handle an expected surge in demand for home loans as the American housing market looks forward to its strongest spring in at least a decade and the coronavirus sends mortgage rates lower.
The bank told home-equity staff on Thursday that half of the team would be transferred to mortgages to keep up with demand, according to an internal memo seen by Bloomberg. Dozens of workers will be transferred, a person familiar with the matter said.
The U.S. housing market has been on a tear thanks to mortgage rates near record lows and one of the warmest Januaries in history, which encouraged buyers to shop early. JPMorgan’s move is an acceleration of shifting workers over the past several months to meet staffing needs amid the boom.
“The recent historically low mortgage interest rates have provided a unique opportunity for us to look at fulfillment capacity and resources to ensure we continue to provide a positive customer experience,” Tricia Maguire-Feltch, an operations executive in home lending, wrote in the memo.
JPMorgan is also planning to pause marketing for helocs, according to the memo. Home-equity lines of credit have become increasingly unpopular among Americans and the banks that offer them. Heloc volume fell by almost half in the past decade, New York Fed data show.
New-home sales jumped to the fastest pace since 2007 and contracts to buy previously owned homes surged the most since October 2010. Mortgage origination volumes rose 42% in the fourth quarter to $752 billion, New York Fed data show.
All of that has helped fuel optimism at JPMorgan, where executives privately predict the bank may actually make money originating home loans this year. The bank lost $850 million in 2018 and broke even last year originating such loans through its retail channel, people familiar with the matter said earlier this week.
JPMorgan spokeswoman Amy Bonitatibus said the bank is shifting resources “to handle the increased volume and continue to close loans fast and on time” as more customers buy and refinance their homes with the bank. The changes primarily affect underwriters and loan processors.
The volume of applications for refinancing mortgages reached the highest since 2013 in February, according to a barometer from the Mortgage Bankers Association.
For JPMorgan, the decision to shift existing staff may help it avoid having to rapidly cut jobs if demand weakens. For workers, the shift will mean having to undergo new training. Lenders have historically hired and fired mortgage staff as a way to handle the cycles of the business.