The residential mortgage division of JPMorgan Chase earned $604 million in the second quarter compared to a year ago loss of $649 million, according to earnings figures released Friday.
JPM’s improved performance is tied to an increase in origination volumes and a decline in nonaccrual loans. In particular, the bank stressed that its retail/consumer mortgage volume hit a new record: $26.1 billion.
Overall, ‘Chase,’ the brand name of JPM’s lending division, funded $43.9 billion of home mortgages, a 29% increase from the second quarter of last year, and a 14% gain from the prior period.
Besides retail, JPM buys loans on a correspondent basis from other lenders, and in some cases provides warehouse lines to firms with a net worth of $10 million or greater.
Mortgage application volume topped $66.9 billion, up 37% from the prior year and 12% from 1Q.
Its third-party servicing portfolio fell 9% to $860 billion from a year ago. (In some cases JPM has been a net seller of servicing.)
Nonaccrual loans tied to real estate came in at $6.7 billion, compared with $6.9 billion in the prior year and $7 billion in 1Q.
“Mortgage production-related revenue, excluding repurchase losses, was $1.6 billion, an increase of $595 million, or 62%, from the prior year, reflecting wider margins, driven by market conditions and mix, and higher volumes, due to a favorable refinancing environment, including the impact of the Home Affordable Refinance Programs,” the bank said.
The entire bank earned $5 billion in 2Q, despite a $4.4 billion trading loss that has stirred controversy about the bank’s controls over its investment banking division.
