JPM 1Q: A $389 Million Loss on Consumer & Mortgages

Even though JPMorgan Chase earned $2.1 billion in the first quarter, its consumer and mortgage lending group lost $389 million during the same period due to loan servicing and credit charges and higher mortgage costs tied to loan modifications.In particular the company singled out higher servicing costs and MSR "risk management results." JPM CEO Jamie Dimon said the banking giant "benefited from underlying growth" in, among other things, higher mortgage refinancing volumes. Mortgage production revenue for JPMorgan Chase was $481 million, as wider margins on new originations were offset partially by an increase in reserves for the repurchase of previously sold loans and lower mortgage origination volumes. Even though the consumer and mortgage unit lost money, net mortgage servicing revenue totaled $1.2 billion, compared to $1 billion a year ago. JPM said it also bought $34 billion in mortgage-backed securities, and has prevented 150,000 foreclosures since October 2008.