Chase 4Q Mortgage Earnings Down 21% on Lower Revenue

JPMorgan Chase reported a 21% drop in year-over-year earnings for its mortgage business as revenue dropped 10%.

The company reported mortgage banking net earnings of $266 million for the period as its revenue of $1.7 billion was affected by a lower repurchase benefit and lower servicing revenue. Chase recorded a repurchase benefit to its earnings of $3 million, down from $131 million for the same period last year. Net servicing revenue fell to $433 million from $529 million.

The credit loss provision increased to $59 million from $13 million.

Mortgage origination volume fell to $22.5 billion, down from $29.9 billion in the third quarter but was practically flat when compared with volume of $23 billion in the fourth quarter of 2014.

The TILA/RESPA integrated disclosure implementation had little effect on JPMorgan Chase's mortgage business in the fourth quarter.

Chief Financial Officer Marianne Lake during the conference call went as far to say that TRID's impact from a financial standpoint was "nothing significant," not just at Chase but across the industry.

During her presentation, Lake said the quarter-to-quarter decline in mortgage volume was seasonal. During the question-and-answer portion, she added that origination times were lengthened by a couple of days as Chase was "being cautious about making sure that we're complying" with TRID.

"Our origination volumes are a little lower than we would have otherwise seen and that's just timing and it's just days," she added.

But there was no impact from a financial perspective, Lake continued, because of the way Chase recognizes income from mortgage originations. A request for further information about this has not yet been returned.