J.P. Morgan Chase is stepping back from FHA lending after paying fines to HUD of $614m. Jamie Dimon stated....."I'm not sure we need to be in the government insured origination business, unless HUD provides lenders some kind of safe harbor for honest mistakes made as we digest a mountain of new procedures and regulations."
The entire mortgage industry is pleading with the Fed to provide a "right to cure", which would allow us to cure the mistake rather than re-purchase and re-sell the mortgage. The cost of which is oppressive. JPMC lost over $50m in the second quarter in it's mortgage origination division after you adjust for the release of a pretax reserve of $137m.
I was once told that it cost them less to purchase our mortgage production than to originate it themselves. If this is true, then we in the mortgage banking arena may see more interest from JPMC in acquiring our product, as a result of their move away from originating these products themselves.