JPMorgan Chase plans to cut 91 jobs at its subprime mortgage loan facility in Ontario, California effective December 15, according to a recent filing with the California Employment Development Department.
The layoffs are a result of tighter lending standards and weak home prices which have led to decreased demand and eligibility for subprime loans.
It is believed that the entire Ontario facility will be shut down as a result of the downsizing.
“That was our entire facility in Ontario,” said Christine Holevas, spokeswoman for the Wall Street-based financial services conglomerate. “Because of what’s going on with home prices and tighter credit conditions, we decided to consolidate.”
JP Morgan noted that it has recently reduced its subprime offerings, cutting all subprime home equity loans and reducing other high-risk options.
Interestingly, mortgage division spokesman Tom Kelly said about 40 percent of the subprime loans the mortgage lender originated a year ago would not be approved based on current guidelines.
New, tighter guidelines include the need for larger down payments, better documentation, and higher credit scores.
JPMorgan said that it expects to originate about $1 billion in subprime loans per month as demand cools.
Last month, 375 Chase employees in the retail nonprime lending unit, including loan officers and support staff, received a 60-day notice.
