Is the party over for mortgage lenders?

by 14 Apr 2013

(Washington Post) -- JPMorgan Chase and Wells Fargo, the nation’s largest banks, reported Friday a decline in applications for home loans, a sign that the strength of the housing recovery may be waning.

The report was the latest worrisome indicator for the economy. The government on Friday said retail sales declined 0.4 percent last month, which was worse than expected and the biggest decline in nine months. The government also reported this month a dramatic slowdown in job creation.

Housing has been seen as one of the recovery’s bright spots. But on Friday, JPMorgan and Wells Fargo reported that the volume of their mortgage applications fell, even though the spring selling season is gearing up.

At JPMorgan, applications fell 8 percent in the first quarter, compared with the previous quarter, though they were up 1 percent from a year earlier. Overall revenue from its mortgage division fell 31 percent.

Wells Fargo’s mortgage applications fell 8 percent, compared with the last three months of 2012, and were down 25 percent from the first quarter of 2012.

The figures, however, aren’t a perfect measure for the health of the housing market. The two banks saw mortgage revenues fall partly because competition increased, squeezing profit margins. In addition, the record low cost of making loans — spurred by stimulus efforts by the Federal Reserve — have started to rise again.

Read full article from Washington Post


  • by Stan Brody | 4/15/2013 5:20:43 PM

    When.... if ever... will the experts and media get it... today some 40% of every transaction closed is investor of REO's and short sales... bulk sales to investment groups are common... The increases being experienced in prices are not real... Today, still, over 20% of homes are still underwater... thus shadow inventory of REO's... deliberately delayed foreclosures and short sales created a shadow inventory that is far greater than the "experts" have a clue...There is no real true recovery ion the owner occupied markets... The actions of the lenders are either unwittingly or deliberatly creating the next housing bubble...

  • by Chris W | 4/16/2013 10:41:13 AM

    Maybe Wells Fargo & Chase's numbers are down because they both suck as lenders and more people are using local lenders and brokers since they provide far superior service. I bought with WF 11 years ago and while I don't remember exactly how many people I spoke with, it must have been at lease 5, all in different parts of the country. I had to resend the same paperwork countless times. I never worked with Chase personally, but I've heard the same thing with all of the big 5. It's one of the things that got me into the mortgage industry. I knew I could serve my clients better than that.


Should CFPB have more supervision over credit agencies?