Home lending fell to the lowest level during any quarter in at least 11 years at JPMorgan Chase & Co. The company also cut its servicing portfolio, reduced its mortgage assets and eliminated mortgage jobs.
The financial services conglomerate reported in its first-quarter earnings report that residential loan originations were $17.7 billion.
It was the slowest three-month period for Chase since Mortgage Daily began tracking its residential loan originations in 2003.
Business sank from the fourth-quarter 2013, when total production was $23.9 billion.
The decline was even more severe when compared to the first quarter of last year, when Chase generated $53.1 billion in mortgage production.
First-quarter production included $17.0 billion in mortgage originations, tumbling from $23.3 billion in the final three months of last year. Mortgage volume has plunged from $52.7 billion in the first-quarter 2013.
Retail originations accounted for $6.7 billion of the latest activity, while correspondent acquisitions were $10.3 billion.
A further dip is likely in the second quarter of this year based on first-quarter mortgage applications, which fell to $26.1 billion in the three months ended March 31 from $31.3 billion in the final quarter of last year. While applications were down just 8 percent for retail activity, they sank 26 percent for correspondent business.
Also included in total first-quarter originations was $0.655 billion in home-equity origination volume, up from the prior quarter’s $0.643 billion and the year-earlier period’s $0.402 billion.
Chase serviced $803.1 billion in mortgages for third parties as of the end of last month, cutting the portfolio from $815.5 billion at the end of last year and $849.2 billion at the same point last year.
In addition, the New York-based firm owned $166.655 billion in mortgages, slipping from $168.036 billion at the end of the previous period. A year earlier, mortgage holdings were $173.839 billion.
Included in the March 31, 2014, mortgage assets were $74.656 billion in home-equity loans, $80.539 billion in prime mortgages and $10.931 billion in subprime home loans.
On the $115.049 billion portion of the mortgage portfolio that excludes credit-impaired loans, the 30-day delinquency rate was 3.33 percent as of the end of last month, down from 3.66 percent three months earlier and 4.61 percent 12 months earlier.
Delinquency on the $51.606 billion in PCI loans dropped to 14.34 percent from 15.31 percent and plunged from 19.26 percent at the same point in 2013.
“If delinquencies continue to trend down and macroeconomic environment remains stable or improves, potential for further modest mortgage reserve releases over time,” the report said.
Income before income tax expense within mortgage banking plunged to $0.189 billion from the fourth quarter’s $0.950 billion and the first-quarter 2013’s $1.110 billion.
First-quarter 2014 mortgage earnings reflected an $0.058 billion loss in production, an $0.270 billion servicing loss and an $0.517 billion profit from real estate portfolios.
“Expect mortgage production pre-tax income to be a loss of approximately $100-150mm in 2Q14, and pretax income to be negative for the full year 2014,” the report said.
Company-wide pre-tax income was $7.507 billion, edging up from $7.500 billion in the fourth-quarter of last year but sliding from $9.082 billion in the same period during 2013.
“JPMorgan Chase had a good start to the year, given there were industry-wide headwinds in markets and mortgage,” JPMorgan Chairman and Chief Executive Officer Jamie Dimon said in the report.
Chase noted that its mortgage headcount has been reduced by 3,000 since Dec. 31, 2013.
Within just the consumer and community banking division, headcount fell to 145,651 from 151,333 as of Dec. 31, 2013, and 161,123 as of March 31, 2013.
Across all businesses, staffing fell to 246,994 employees from 251,196 people as of year-end 2013. At the same point last year, 255,898 people were on staff at Chase.
Branch count increased by two compared to the end of last year to 5,632.