JP Morgan Chase 2015 Annual Report Download - page 38
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36
• Originations. We reduced our product set
from 37 to 15, we will complete the rollout
of a new originations system, and we will
continue to leverage digital channels to
make the application process easier for
our customers and more ecient for us.
In addition, we have dramatically reduced
Federal Housing Administration (FHA)
originations. Currently, it simply is too
costly and too risky to originate these
kinds of mortgages. Part of the risk comes
from the penalties that the government
charges if you make a mistake – and
part of the risk is because these types of
mortgages default frequently. And in the
new world, the cost of default servicing is
extraordinarily high.
• Servicing. If we had our druthers, we
would never service a defaulted mortgage
again. We do not want to be in the busi-
ness of foreclosure because it is exceed-
ingly painful for our customers, and it is
dicult, costly and painful to us and our
reputation. In part, by making fewer FHA
loans, we have helped reduce our foreclo-
sure inventory by more than 80%, and
we are negotiating arrangements with
Fannie Mae and Freddie Mac to have any
delinquent mortgages insured by them be
serviced by them.
• Community Reinvestment Act and Fair
Lending. Finally, while making fewer FHA
loans can make it more dicult to meet
our Community Reinvestment Act and
Fair Lending obligations, we believe we
have solutions in place to responsibly
meet these obligations – both the more
subjective requirements and the quantita-
tive components – without unduly jeopar-
dizing our company.
36