Chase, MBA Mortgage Application Volume Jumps

October 31, 2007 No Comments »

According to the Mortgage Bankers Association’s weekly survey, mortgage application volume increased 3.8 percent during the week ended October 26.

Much of the growth was driven by a surge in refinance volume, which leapt by 9.2 percent to cover the decline in purchase volume, which dipped 0.7 percent.

Total refinance volume accounted for 49.6 percent of all mortgage applications, a 2.6 percent increase from the week prior.

Interest rates also declined, with the average rate on a 30-year fixed mortgage dipping to 6.15 percent from 6.21 percent the previous week, while the one-year adjustable-rate mortgage fell to 5.93 percent last week from 6.1 percent.

The MBA survey covers roughly 50 percent of all residential retail mortgage originations each week, and does not include wholesale loan origination volume.

JPMorgan Chase & Co. also reported a surge in mortgage volume, chalking a 35 percent increase in the third quarter despite the ongoing mortgage crisis.

The banking giant originated $39.2 billion in mortgages during the quarter ending Sept. 30, attributing much of it to their ability to fund loans in-house.

And through the first nine months of 2007, mortgage originations are up 34% to $119 billion, while its share of the mortgage and home equity market rose to 9%, from 5.7% in the year-ago quarter.

Because JPMorgan Chase is such a large, well-positioned financial services firm, it doesn’t need to rely on the secondary market to sell its loans, unlike wholesale mortgage lenders who typically dump all the loans they originate.

Many of those wholesale lenders have since gone out of business or have shifted their focus to conforming loans, allowing Chase to ramp up the origination of jumbo loans and non-conforming mortgages with little competition in their way.

During the year, JPMorgan Chase has increased its sales force to more than 5,000 employees while the rest of the financial sector has seen a record number of layoffs.

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