JPMorgan Chase continued to downsize its mortgage operations in the first quarter, cutting 3,000 employees as it increased its pricing on new originations.
"We continued to make good progress on right sizing capacity and reducing expenses," said Marianne Lake, the bank’s chief financial officer, in a conference call Friday with investors and analysts.
Lake noted that production core expense was reduced by $110 million during the first quarter.
"The head count is down nearly 3,000 since the end of year and 14,000 since the beginning of last year."
Overall, Chase reported net income of $114 million from its mortgage banking business in the first quarter compared to a loss of $448 million in the prior quarter.
Lake also stressed that Chase is pricing loans to reflect the risk of default and the costs associated with servicing, which is significantly higher for high loan-to-value loans.
"As a result of pricing actions taken, we believe we may have lost some share in the quarter but we will remain disciplined with respect to appropriate risk adjusted returns. And this is consistent with our objective to have a smaller, high quality and less volatile mortgage business in the future," Lake said.
Chase reported single-family mortgage production of $17 billion in first quarter, down 5% from the prior quarter and 68% a year ago.