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Mortgage Originations Plunge at Chase

Q4 originations sink 42% from Q3

Jan. 14, 2014

By Mortgage Daily staff

Quarterly mortgage production at JPMorgan Chase & Co. plummeted to the lowest level in more than a decade, though home-equity originations moved higher. The New York-based firm trimmed its mortgage servicing rights and investment holdings -- cutting delinquency in the process. Mortgage staffing was reduced by more than 10,000 last year.

Total home loan originations were $23.864 billion during the three months ended Dec. 31, according to earnings data released Tuesday and the Mortgage Daily Fourth Quarter 2013 Mortgage Origination Survey.

Quarterly activity slowed to the lowest level since at least 2002 -- the oldest available data maintained by Mortgage Daily.

Business plummeted from the third quarter, when $41.1 billion was originated, and tumbled from the final three months of 2012, when $51.6 billion in loans were closed.

Total fourth-quarter production included residential loan originations, excluding home-equity loans, of 112,035 loans for $23.221 billion, down from $40.5 billion in the prior period and $51.2 billion in the fourth-quarter 2012.

The retail channel accounted for $9.8 billion of non-HEL fourth-quarter activity, while correspondent purchases were $13.5 billion.

Also included in the latest total was $0.643 billion in HEL production, growing from $0.580 billion the previous quarter and $0.373 billion in the year-earlier period.

Purchase financing accounted for $13.0 billion of fourth-quarter volume, off more than a third from the prior period but 6 percent better than the year-earlier period.

Non-HEL originations are poised for a further decline based on loan applications, which fell to $31.3 billion from the third quarter's $40.4 billion.

For all of 2013, Chase originated more than 800,000 loans for $167.6 billion including HELs. The annual total was down from $182.2 billion funded in 2012.

The third-party mortgage servicing portfolio finished last year at $815.5 billion, declining from $831.1 billion at the end of the prior period and $859.4 billion at the end of the prior year.

Over-and-above its serviced-for-investors portfolio, Chase owned $168.036 billion in home loans. The investment portfolio was trimmed from $170.486 billion as of Sept. 30 and fell from $177.326 billion as of Dec. 31, 2012.

Holdings as of Dec. 31, 2013, included $76.790 billion in HELs, $79.416 billion in prime mortgages and $11.279 billion subprime mortgages.

Delinquency of at least 30 days on the portion of the portfolio that excluded purchased credit impaired loans tumbled to 3.66 percent from 3.81 percent. The past-due rate has plunged from the end of 2012, when it stood at 5.03 percent.

On just the purchased credit impaired portfolio, 30-day delinquency was cut to 15.31 percent from 16.19 percent three months earlier and 20.14 percent 12 months earlier.

Chase finished 2013 with $0.681 billion in repurchase liability, slashing the total from $2.811 billion at the end of 2012.

Fourth-quarter income before taxes within mortgage banking was $0.950 billion, retreating from $1.164 billion three months earlier but stronger than $0.688 billion a year earlier.

The fourth-quarter numbers reflected an $0.274 billion loss in production, an $0.002 billion servicing profit and a $1.222 billion profit from real estate portfolios..

At the parent company level, Chase earned $7.5 billion before taxes, soaring from less than $0.1 billion in the previous quarter and up from $7.0 billion in the year-earlier report.

Mortgage headcount was reduced by 11,000 last year.

Within the consumer and community banking division, 151,333 people were on the payroll. Headcount fell from 156,064 at the end of October and 164,391 at the end of 2012.

Chase had 5,630 branches in operation as of Dec. 31, 2013, slightly fewer than 5,652 as of Oct. 31.

Chase profile

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