JP Morgan, Wells Fargo 1Q Results Suggest Mortgages Are On Mend |
| Wall Street Journal - Apr 13, 2012 |
After years of dire straits in the aftermath of the U.S. real-estate collapse, the mortgage business is showing signs of life again.
In the kick-off to a week of first-quarter bank earnings reports, results from two industry heavyweights--J.P. Morgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC)--showed strong gains in their mortgage lines.
Wells Fargo reported a 42% increase in income from its mortgage-banking business, to $2.87 billion from $2.02 billion in the year-ago quarter. At J.P. Morgan, mortgage profits swung to a $461 million gain in the quarter, from a $1.1 billion loss last year. The bank's mortgage revenue rose 80%, to $1.6 billion.
Chief executives of both banks said Friday that they believed the mortgage market was finally turning around.
"On the housing side, we're seeing improvement, and we've been seeing that for some time," Wells CEO John Stumpf said during a conference call with analysts. "When you have the dynamics of higher rental rates and lower home values at attractive financing rates, there's a point in time where the market is going to clear. I think we're getting very close to that tipping point."
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- Posted: 2012-04-13 14:02:55
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