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Mortgage Originations Up at Chase, Servicing Down

Although quarterly mortgage earnings deteriorated from a year ago at JPMorgan Chase & Co., company-wide income rose. Mortgage originations fell, as did servicing and headcount.

The New York-based company said in its second-quarter earnings report that income before income tax expense was $10.6 billion in the three months ended June 30.

Chase’s earnings were better than the $9.7 billion in profits a year prior. Income was slightly off, though, from $10.7 billion earned in the first-three months of this year.

In its home-lending business, Chase earned $324 million from mortgage fees and related income, less than $404 million a year earlier and $465 million three months earlier.

The deterioration came even as company-wide single-family loan originations climbed to $23.7 billion from $20.0 billion in the first-three months of this year. Business came up short, though, of the $26.2 billion originated in the year-earlier quarter. Full first-half 2018 volume was $43.7 billion.

Of just the $21.5 billion in mortgages that were originated through the consumer & community banking business, $10.4 billion was retail lending and $11.1 billion were correspondent acquisitions.

Chase serviced $802.6 billion in residential loans including $533.0 billion serviced for third parties. The total portfolio was diminished versus $804.9 billion three months earlier and $827.8 billion one year earlier.

The ratio of
mortgage-servicing rights carrying value to the corresponding loans serviced was 1.16 percent, while the MSR revenue multiple was 3.31 times.

Residential assets of $241.238 billion consisted of $202.205 billion in mortgages and $39.033 billion in home-equity assets. Residential holdings grew from $240.325 billion as of March 31 and $235.991 billion as of mid-2017.

Thirty-day residential delinquency, excluding purchased-credit-impaired loans, was 0.86 percent, 12 basis points better than at the end of the first quarter and 16 BPS lower than at the same point last year.

On the PCI loans, the
rate was reduced to 9.40 percent from 9.49 percent. But the PCI rate deteriorated from 9.06 percent one year previous.

As of mid-2018, Chase had 259,942 people on its payroll. Headcount was trimmed from 253,707 employees but has expanded from 249,257 people one year previous.

Branch count finished last month at 5,091, fewer than 5,106 at the end of March.

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