Did anyone noticed this? It appears the JPM mortgage banking unit is losing their shirt.
From JPM earnings report:
jpmorganchase.com
Mortgage Banking net loss was $83 million compared with net income of $53
million in the prior year. Net revenue was $198 million, down by $194 million.
Revenue comprises production revenue and net mortgage servicing revenue.
Production revenue was $197 million, down by $32 million, reflecting a 28%
decrease in mortgage originations, partially offset by wider margins. Net mortgage
servicing revenue, which includes loan servicing revenue, MSR risk management
results and other changes in fair value, was $1 million compared with $163 million in
the prior year. Loan servicing revenue of $579 million increased by $46 million on a
13% increase in third-party loans serviced. MSR risk management revenue of
negative $251 million was down by $204 million from the prior year, reflecting a
$235 million negative valuation adjustment to the MSR asset due to changes and
refinements to inputs and assumptions used in the MSR valuation model. Other
changes in fair value of the MSR asset, representing runoff of the asset against the
realization of servicing cash flows, were negative $327 million. Noninterest expense
was $334 million, up by $25 million, or 8%.
Highlights Include:
?? Mortgage loan originations of $28.4 billion were down 28% from the prior
year and down 10% from the prior quarter.
?? Total third-party mortgage loans serviced were $510.7 billion, an increase of
$60.4 billion, or 13%, from the prior year. |
