JPMorgan Chase has agreed to sell its U.S. Department of Agriculture Rural Development mortgage origination business to Freedom Mortgage of Mount Laurel, N.J.
Unlike JPMorgan's public spat with the Federal Housing Administration, there is no indication the bank had any beef with the USDA program, which accounts for just a sliver of its originations.
"This decision aligns with our overall strategy to simplify our mortgage business. We will continue our strong partnership with the USDA to service our existing customers," said JPMorgan spokeswoman Amy Bonitatibus.
Last year, the nation's largest bank by assets originated $100 billion of home loans, with about 5% or $5 billion of them USDA loans.
All of this business was generated through the correspondent channel; these were closed loans purchased from other mortgage lenders. It did not originate any USDA loans directly through its retail origination channel.
The company had a $910 billion mortgage servicing portfolio at yearend, with roughly 650,000 loans serviced. Less than 5% of the loans serviced were USDA mortgages.
JPMorgan Chase will continue servicing those loans until the portfolio runs off.
In May 2013, JPMorgan Chase stopped purchasing USDA rural development loans originated by mortgage brokers.
Freedom Mortgage did not immediately respond to a request for comment. The price of its deal with JPMorgan was not disclosed.