On a call with analysts, he called mortgage servicing – the bookkeeping for regular customer payments – hard. This has become a critical issue and one reason why banks have been moving away from significant parts of the mortgage business.”īecause of post-crisis capital rules, “owning mortgages becomes hugely unprofitable,” Dimon lamented later in his note.
Because there are so many regulators involved in crafting the new rules, coupled with political intervention that isn’t always helpful, it is hard to achieve the much-needed mortgage reform. Today, bad mortgage rules are hindering the healthy growth of the U.S. “In the early 2000s, bad mortgage laws helped create the Great Recession of 2008. Jamie Dimon, JPM’s CEO, said this in his shareholder letter released at the same time as Q1 earnings: (Wells Fargo is still the largest originator of mortgages in the U.S., with a 10.7% market share in 2018, according to Inside Mortgage Finance.)Įarlier coverage: Why mortgage lending at Wells Fargo, Chase and Citi plunged , which reported earnings the same day, mortgage lending was down 23% compared to the year earlier. Said that mortgage originations were down 18% compared to a year ago in the first quarter. In an earnings report last week, JPMorgan Chase In the mortgage market of 2019, borrowers can do just about everything online, never meeting the lender behind the process.Īnd as comments from executives of America’s biggest banks made clear last week, that person – or institution – making the loan is increasingly less likely to be a banker.
You can kiss George Bailey’s mortgage market goodbye.Īs the small-town banker in Frank Capra’s “It’s a Wonderful Life,” Bailey epitomized an old-fashioned world in which bankers know every borrower personally. Mortgages aren’t looking wonderful to the nation’s largest banks.
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