JPMorgan Chase Boosts Matching Loans
JPMorgan Chase, the largest custodian bank in the country, increased mortgage origination volume to $ 32.5 billion in the fourth quarter, up 12% from the previous quarter. But that doesn’t quite tell the whole story.
The bank led by Jamie Dimon increased overall mortgage origination volume primarily through its correspondent channel, according to the earnings report released this week. Its retail origins actually declined slightly in the fourth quarter, likely due to an increase in coronavirus cases across the country. (see page 15).
Overall, retail fixtures fell to $ 20.1 billion from $ 20.7 billion in the third quarter, according to its earnings report. Correspondent volume increased to $ 12.4 billion, well above the volume of $ 8.3 billion in the previous quarter.
Even with the overall quarterly increase, the bank has not fully returned to its pre-pandemic creation volumes. In the fourth quarter of 2019, JPMorgan Chase hails from $ 33.3 billion in mortgages.
It also means that the company’s overall mortgage share continues to decline, as non-bank lenders such as Rocket companies, United Wholesale Mortgages, Guaranteed rate, Loan deposit, Starting point and others walk on gas.
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JPMorgan Chase’s profit margins fell to 247 basis points in the fourth quarter, down 17 basis points from the previous quarter. The valuation of the MSR increased by 12% compared to the previous quarter. Book value increased to 74 basis points from 66 basis points last quarter, and the MSR service charge multiple increased to 2.64X from 2.28X.
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Overall, the bank made $ 12.1 billion in profits – $ 3.79 per share – on revenue of $ 30.2 billion. That topped analysts’ expected earnings of $ 2.62 per share on revenue of $ 28.7 billion. The fourth quarter numbers also exceeded those for the fourth quarter of 2019, which amounted to $ 29.2 billion in revenue.
JPMorgan Chase still has over $ 30 billion in reserves that had been set aside to protect against credit losses due to the ongoing COVID-19 pandemic.
Overall, JPMorgan Chase manages $ 626 billion in mortgages, down 4% from $ 654 billion in the third quarter and 18% from $ 761.4 billion in loans under management in the fourth quarter 2019.