JPMorgan Chase reported lower mortgage banking revenue in the fourth quarter as the returns from its servicing business declined from the previous year.

The company had $1.44 billion of mortgage banking revenue in the fourth quarter, down 15% from $1.69 billion for the same period in 2016. This was "predominantly driven by lower net servicing revenue and loan spread compression," a company press release said.

Its mortgage banking revenue for the full year was $5.96 billion, down 19% from $7.36 billion in 2016.

On the origination side, volume slipped 9% from the third quarter, but was still the second best for the company in 2017.

Its home lending unit originated $24.4 billion in the fourth quarter, compared with $26.9 billion for the third quarter and $29.1 billion in the fourth quarter of 2016.

JPMorgan Chase earnings

For the full year, JPMorgan Chase originated $97.6 billion, a 6% decline from 2016's $103.9 billion.
Retail production made up $11 billion of the fourth-quarter volume while correspondent purchases totaled $13.4 billion. During 2017, it had $40.3 billion of retail production and $57.3 of correspondent originations.

Net production revenue totaled $185 million in the fourth quarter, up 17% from $158 million in third quarter and 1% from $183 million in the fourth quarter of 2016.

JPMorgan Chase's mortgage servicing portfolio totaled $816.1 billion (including $553.5 billion serviced for third parties) as of Dec. 31, 2017, compared with $846.6 billion ($591.5 billion serviced for third parties) on the same day one year prior.

Net servicing revenue declined both on a quarter-to-quarter and year-to-year basis to $193 million from $270 million in the third quarter and $327 million in the fourth quarter 2016.

JPMorgan did release $150 million of reserves related to mortgage lending because of continued improvement in both home prices and delinquencies.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry