Mortgage Daily Logo
mortgage news from industry experts

Chase Activity Holds Up

Chase Activity Holds Up$49.8 billion Q4 originations

January 16, 2008

By SAM GARCIA

JPMorgan Chase & Co. reported solid quarterly mortgage production and record annual earnings and said it expects to increase its mortgage market share. But it still has significant exposure to Alt-A holdings and delinquency is on the rise.

Residential mortgage volume, including home-equity activity, was $49.8 billion during the fourth quarter, the New York-based company reported today. In the third quarter, total fundings were $50.4 billion, while volume was $42.7 billion a year earlier.

For all of 2007, JPMorgan said mortgage volume was $207.7 billion, compared to $171.1 billion for all of 2006.

Fourth quarter residential originations were $40.0 billion, climbing from $39.2 billion during the third quarter and $29.8 billion a year earlier, the report said. Home-equity business fell to $9.8 billion from $11.2 billion in the third quarter and $12.9 billion in the fourth quarter 2006.

Residential production was mostly evenly distributed, with retail, wholesale, correspondent and “CNT” each accounting for roughly one-quarter of the latest period’s business, according to the data.

In an investor presentation supplement, the company said it expects to continue gaining market share in mortgage lending this year.

JPMorgan said it owned $110.5 billion in HELs and mortgages as of Dec. 31. Its servicing portfolio ended the period at $614.7 billion.

At 3.03 percent at the end of last year, delinquency on all types of retail loans was higher than 2.39 percent on Sept. 30, 2007, and 2.02 percent on Dec. 31, 2006. The net charge-off rate on HELs ended 2007 at 1.05 percent, up from 0.65 percent the prior quarter and 0.24 percent a year earlier. Net charge-offs on mortgage loans were 2.06 percent, rising from the third quarter’s 1.60 percent and 0.20 percent a year prior.

Mortgage banking net income was $332 million during the latest period, compared to a $48 million loss in the third quarter and a $34 million profit during the fourth quarter 2006. Despite a $1.3 billion markdown on subprime positions, overall earnings were still $3.0 billion and full-year earnings were a record $15.4 billion.

“Our lower quarterly results were affected by the Investment Bank’s markdowns in subprime-related positions and weaker trading,” JPMorgan Chairman and Chief Executive Officer Jamie Dimon said in the report. “In addition, our consumer home equity and subprime loan portfolios performed worse than we expected.”

The company said its total subprime and subprime collateralized debt obligation exposure was $2.7 billion as of Dec. 31. Alt-A exposure totaled $6.4 billion at the end of the period, though the company’s exit from wholesale Alt-A lending today is likely to push this figure down.

JPMorgan’s results sharply contrast those of Citigroup Inc., which yesterday said it lost $9.83 billion on $18.1 billion in subprime mortgage write-downs and $4.1 billion in consumer loan losses.

The financial services giant said it employed 180,667 people at the end of 2007, about 6,300 more employees than a year earlier. Retail financial services headcount ended the year at 69,465.


JPMorgan Chase profile
 

next story

back to current headlines
 

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

THE TRUSTED PROVIDER OF ACCURATE RATES AND FINANCIAL INFORMATION