JPMorgan Chase (JPMorgan) and Citigroup are trying to revive a market that has withered over a period of three years, amid mounting homeowner defaults and bank foreclosures. Both the banks are showing interest in ‘Jumbo’ mortgages market that has been witnessing turbulent times since 2007, when soaring defaults on home loans drove investors to flee securities backed by mortgages, reported Bloomberg.
The New York-based banking giants are again expanding in ‘jumbo’ mortgages, a part of the mortgage business, where loans are made through third parties to buy luxurious homes. While JPMorgan has begun purchasing new jumbo loans made by other lenders, Citigroup is offering the loans through independent mortgage brokers.
According to Inside Mortgage Finance, new jumbo lending, which consists of refinancing as well as debt for home buyers, skyrocketed to $348 billion in 2007 before plunging to $98 billion in 2008, as mortgage firms tightened standards.
