JPMorgan Chase chairman Jamie Dimon recently sat down with analysts at Citigroup Global Markets and told them what many smaller players in the mortgage business have believed all along: that a 20% downpayment definition on the 'qualified residential mortgage' (QRM) test will benefit the nation's megabanks.

A Citigroup analyst report on Dimon's comments angered nonbank mortgage firms and smaller depositories alike. In a press statement, Community Mortgage Banking Project managing director Glen Corso said: "You heard it straight from the top – a 20% down payment requirement creates a huge advantage for the 'too-big-to-fail' banks," said Corso.

According to figures compiled by National Mortgage News, the nation's three largest banks – Wells Fargo, Bank of America, and JPMorgan – control 50% of the mortgage market (based on 4Q10 origination numbers).

Corso added that a 20% down payment QRM requirement "will simply accelerate" the market share concentration the big three currently enjoy. "Unfortunately, what's good for the megabanks won't be good for consumers or the fragile housing market," he said.

According to the Citigroup analyst report, Dimon called the QRM advantage an unintended consequence, noting that the megabanks have a greater balance sheet capacity to support holding a 5% slice of (the risk retention rule).

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