Loans propel Wells Fargo, JPMorgan to record quarter profits, say housing has turned corner
10/13/2012NEW YORK — Is the mortgage market really back?
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.
Jamie Dimon, JPMorgan chief executive officer, declared that the housing market “has turned the corner.”
Wells Fargo CEO John Stumpf said that “every quarter, we have more confidence.”
Wells Fargo 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 also was propped up by government programs such as a federal initiative meant to encourage refinancing, and the Federal Reserve’s pledge to buy more mortgage-backed bonds.
Still, the numbers were eye-catching: Mortgage lending revenue jumped 56 percent at Wells Fargo and 29 percent at JPMorgan compared with a year ago.
And it’s all against a backdrop of signs nationwide that the housing market could be healing.
A Federal Reserve survey 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 with mortgage strength means the housing market is fixed.
At both banks, about 75 percent of the mortgage-lending revenue was from refinancing.
Wells Fargo and JPMorgan are bellwethers for mortgages. Wells Fargo controls a third of the market, according to the trade publication Inside Mortgage Finance. JPMorgan is second, controlling about 11 percent.