The country’s two biggest mortgage lenders, Wells Fargo and JPMorgan Chase, reported Friday that a surge in home lending pushed them to record profits.
JPMorgan CEO Jamie Dimon declared that the housing market “has turned the corner.” Wells Fargo CEO John Stumpf said that “every quarter, we have more confidence.”
Wells said it issued $139 billion in mortgages from July through September, compared with $89 billion in the same period last year. JPMorgan wrote $47 billion in mortgages, compared with $37 billion last year.
There were signs, though, that the boom isn’t as strong as it might seem. The large majority of mortgage lending was driven not by people buying new homes but by owners refinancing mortgages, which is less helpful to the housing market.
The business was also propped up by government programs, like a federal initiative meant to encourage refinancing, and the Federal Reserve’s pledge to buy more mortgage-backed bonds.
The banks’ mortgage units are also a magnet for legal disputes, with both banks facing new mortgage-related lawsuits just this month. And nobody knows how long the revenue gains will last.
“We don’t expect to count on the high margins and mortgage origination forever,” Dimon said in a call with financial analysts. “You’re going to have it next quarter, maybe for a couple of quarters after that, but it won’t last for that much longer.”
Still, the numbers were eye-catching: Mortgage lending revenue jumped 56 percent at Wells and 29 percent at JPMorgan compared with a year ago, driving overall revenue gains at both banks.
And it’s all against a backdrop of signs nationwide that the fractured housing market could be healing. A Federal Reserve survey earlier this week found that a stronger housing market helped economic growth in almost every part of the country. Home sales are up, prices are rising more consistently in most places and builders are more confident.
The executives didn’t suggest that one quarter of mortgage strength means the housing market is fixed. At both banks, about three-quarters of the mortgage-lending revenue was from refinancing. About 15 percent was from a government program, the Home Affordable Refinance Program.
The holiest plant of the Christmas season may be a raggedy shrub with peeling bark that seems to grow best in a dusty backyard in Tempe, Ariz. This is Boswellia sacra, better known as the frankincense tree. The shrub’s gum resin is one of the three biblical gifts that the wise men bestowed on the infant Jesus. Until recently, Americans who wished to cultivate their…
FRESNO, Calif. — Federal law now allows visitors to carry guns in national parks, but you can’t just slip a loaded pistol into your backpack and take a hike. Pay attention, because this is a little complicated. You will need a concealed weapons permit to carry the loaded gun in the backpack. But you don’t need any kind of permit if you just want to…
Move over, large lap pools. Smaller swimming holes are making a big splash. Sure, the economy is playing a role in making this luxury littler: Smaller pool equals smaller budget. But it's more than that, says Brett Berry, owner of Landscape Renderings, a Missouri business that designs and builds outdoor living environments. “You can create a fantastic sense of intimacy and atmosphere with a small…
A few weeks ago, a reader sent me an eloquent email complaining about a story in which I'd suggested paddling on the northern branch of Sparks Lake as an alternative to more crowded portions of the popular lake. The writer said that over the decades, he'd seen Central Oregon “loved to death. ” Now, powder is tracked out in 30 minutes, Sparks Lake is always…
A barred owl that drew crowds of onlookers while swooping around at Farewell Bend Park earlier this year may well be dead. The owl was seen from mid-January into last month, regularly hunting for mice and voles along the Deschutes River just upstream of the Old Mill District. It then disappeared about a month ago. Two photographers found a dead owl March 3 about 10…