JPMorgan Chase officials say they plan to liquidate the company’s giant $154 billion mortgage portfolio to “close to zero” as it works through the bank’s mortgage losses and litigation of loan-servicing and foreclosure practices. During the company’s earnings conference call with analysts, JPMorgan CEO Jamie Dimon noted that the company will continue to reduce its mortgage holdings by 10 percent to 15 percent a year “forever.” Last year, the company reduced its mortgage holdings by $19.3 billion. JPMorgan reported earnings of ...

The dramatic slowdown in mortgage lending activity during the second quarter of 2011 led to significant declines in virtually all states, according to a new analysis of agency securitization data by Inside Mortgage Trends. Fannie Mae, Freddie Mac and Ginnie Mae securitized a total of $565.5 billion of single-family mortgages during the first six months of 2011, but much of that activity was front-loaded in the first quarter. Agency mortgage-backed securities production declined 33.7 percent from the ... [includes one data chart]

Bank of America said it will spend $400 million just to implement the servicing changes it agreed to in a controversial proposed settlement with a group of investors in non-agency mortgage-backed securities issued by Countrywide Financial. The proposed settlement itself would cost the bank $8.5 billion, and BofA set aside another $5.5 billion to cover other possible buyback demands. Reckoning the cost of upgrading servicing systems has been a common theme in an industry that faces even bigger expenses from punitive charges. Ally Financial this week said it will cost the company ...

Mortgage banking income was hit hard by rising expenses and declining production during the first quarter of this year, with more companies failing to generate a net profit from their business, according the Mortgage Bankers Association’s most recent performance report. The average firm participating in the MBA survey reported $617,000 in pretax income during the first quarter, down 60 percent from the fourth quarter’s average $1.56 million. Only 63 percent of lenders reported a net profit for the first quarter, down from 84 percent in the final three months of 2010. Mortgage bankers reported ...

Commercial banks reported a measurable increase in earnings from their mortgage banking activities during the first quarter of 2011, but production volume is slowing and the industry continues to bear a significant burden from repurchase demands. Banks reported a combined $4.21 billion in mortgage banking income during the first quarter, according to an analysis of call report data by Inside Mortgage Trends, an affiliated newsletter. That was up a healthy 20.8 percent from the last four months of 2010, though it trailed the industry’s mortgage...[includes one data chart]

Housing could be in for a double-dip recession that would have a significant impact on bank earnings, according to officials at Standard & Poor’s. Robert Shiller, a co-founder of S&P’s/CaseShiller Home Price Indices, said house prices could sink another 10 to 25 percent over the next five years. “We’re kind of at a tipping point now,” he said, speaking at a housing conference sponsored by the rating service this week. “Unemployment rates are up and housing prices are down.” The lower home prices evident in data from March 2011 could represent a...

Ocwen Financial Corp. is poised to significantly expand its mortgage servicing business with the acquisition of Litton Loan Servicing from Goldman Sachs Group for approximately $264 million. The sale price does not reflect certain assets that Goldman will retain, the investment bank said in a June 6 statement announcing the deal. The bank did not specify which assets would be excluded from the transaction. The planned sale will end...

Banks reported a significant decline in the volume of mortgage repurchases and indemnifications they recorded during the first quarter of 2011, but buybacks clearly continue to weigh on mortgage banking profitability. According to a new call report analysis by Inside Mortgage Trends, banks reported a total of $3.83 billion in mortgage repurchases and indemnifications during the first quarter. That was down 19.2 percent from the previous three-month period.The buyback problem has clearly improved since the nine months between the... [includes one data chart and one graph]

A sharp turnaround by the two biggest banks in the mortgage banking business led to a significant increase in aggregate mortgage banking income reported by commercial banks in the first quarter. A new Inside Mortgage Trends analysis and ranking reveals that banks reported a combined $4.215 billion in noninterest income on their mortgage banking activities during the first quarter of 2011. That was up 20.8 percent from the industry’s $3.488 billion in mortgage banking income during the fourth quarter of 2010. But in the top-heavy mortgage banking market, the results were skewed dramatically by the performance of... [Includes one data chart]

Credit card giant Discover Financial Services is adding mortgages to its menu of financial products and services with the acquisition of Home Loan Center, a subsidiary of Tree.com. The sale price for Home Loan Center, which operates as LendingTree Loans, is up to $56.0 million. LendingTree, a correspondent lender, originates and processes home loans in all 50 states and the District of Columbia. The acquisition includes substantially all of HLC’s operating and related assets as well as LendingTree’s lead-generation system, adding a residential mortgage origination component to Discover’s direct lending system. Discover, a direct banking and...