Chief financial officer Mariana Lake told institutional investors Monday that refinancing applications have dropped 60% industrywide since May 2013.
“Although the purchase market continues to grow and we expect it to continue to grow, it won’t make up for those volumes in the near term,” she said at the Barclays Global Financial Services Conference.
Along with reduced loan production, Chase and other lenders are also facing margin compression due to competitive pressures and higher secondary market rates, she said.
Meanwhile, Chase is reducing its expenses and mortgage workforce, which will impact its mortgage banking income over several quarters.
“We expect pretax margins and pretax income to be slightly negative in each of the next two quarters,” Lake said.
JPMorgan Chase reported pretax production income of $582 million in the second quarter.
The giant bank reports third-quarter results on Oct. 11.