JPMorgan Chase: Record Mortgage Lending Propels $5.7B Profit

It was just five months ago when news broke of JPMorgan Chase’s multibillion-dollar trading loss, but record mortgage lending has propelled the nation’s largest bank to a $5.7 billion profit for the third quarter.
JPMorgan’s $1.40 a share for the third quarter surpassed Wall Street’s estimates. Profit was up 34 percent. Revenue was $25.9 billion, up 6 percent from the year-ago quarter.
The bank’s mortgage production came in at a record pretax income of $1.1 billion, an increase of $594 million from the prior year.
The mortgage lending reflected wider margins, fueled by historically-low interest rates and higher volumes bolstered by the Home Affordable Refinance Programs (“HARP”), the government’s expanded and popular vehicle for underwater borrowers.
“Importantly, we believe the housing market has turned the corner,” JPMorgan CEO Jamie Dimon said.
The third-quarter performance is a bit of a vindication for Dimon, who has been fighting to deflect attention from the controversy behind the banking giant’s trading loss in credit derivatives. The losses on the bet were $449 million in the third quarter, bringing the total loss to $6.25 billion for the year.
The third-quarter results may help ease the impact of the ripple effect of the trading loss, which has attracted the attention of law enforcement authorities and lawmakers looking to separate retail banks from risky trades.
The bank also said fewer costumers were late on their credit card bills. Write-offs of card loans fell to 3.6 percent, from 4.7 percent the previous year.
Lending surged beyond mortgages. Credit card sales volume was up 11 percent. The bank said it also has provided $15 billion of credit to U.S. small businesses year-to-date, up 21 from last year.

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