JP Morgan Chase, which boasted that it extended more than $100 billion in new credit during the fourth quarter, saw mortgage originations slip further.
Total fourth quarter home loan originations were just $28.1 billion, down 30 percent from the prior year and off 25 percent from the third quarter.
Meanwhile, home equity loan originations fell to just $1.7 billion, down $8.1 billion, or 83 percent from a year ago, and it’s no wonder why.
Prime mortgage charge-offs more than quadrupled to a rate of 0.89 percent, while subprime mortgage charge-offs nearly tripled to 5.64 percent and home equity charge-offs more than doubled to 2.15 percent.
Mortgage production revenue fell to $62 million, down $103 million, thanks to markdowns and an increase in reserves related to the repurchase of previously sold loans.
However, third-party loans serviced increased $557.9 billion, or 91 percent, to $1.2 trillion, thanks to its acquisition of Washington Mutual, which offset losses.
Interestingly, Chase said branch sales of credit cards increased 56 percent, which seems like a negative at this point, but I suppose time will tell.
Chase boss Jamie Dimon painted a bleak picture going forward, saying, “If the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves,” in a statement.
Earlier this week, Chase exited the wholesale lending channel to focus on mortgage lending via its enhanced retail bank branch channel.