Meanwhile,
Wells
Fargo
reported
$7.4
billion
in
mortgage
originations,
a
68%
jump
from
the
previous
quarter
and
a
40%
increase
from
the
same
period
in
2024. 

The


Mortgage
Bankers
Association
(MBA)
had
forecast
a
43%
quarterly
gain
for
the
industry,
according
to
a
report
by

Keefe,
Bruyette
and
Woods
(KBW)
analysts. 

“While
the
volume
growth
was
expected,
the
lower
margins
despite
higher
volumes
were
slightly
below
expectations
but
could
have
been
driven
by
interest
rate
volatility
in
the
quarter
and
its
impact
on
pipeline
hedging,”
the
analysts
wrote. 

On
the

servicing
side,
JPMorgan’s
mortgage
servicing
rights
(MSR)
portfolio
hit
$9
billion
in
Q2
2025,
up
from
$8.8
billion
a
year
earlier.
Wells
Fargo’s
servicing
book
stood
at
$6.4
billion,
down
2%
quarter
over
quarter
and
9%
year
over
year
by
unpaid
principal
balance
(UPB). 

Mortgage
earnings 

Wells
Fargo
posted
$821
million
in
home
lending
revenue
in
Q2,
down
5%
from
Q1
and
slightly
below
the
$823
million
level
in
Q2
2024.
The
bank
cited
“lower
mortgage
servicing
income
from
portfolio
run-off
and
sales.” 

Net
servicing
income
dropped
25%
from
Q1
to
$136
million,
though
it
was
up
53%
year
over
year.
Mortgage
banking
non-interest
income
fell
to
$230
million
from
$332
million
in
Q1
and
$243
million
a
year
ago.

Chief
financial
officer
Mike
Santomassimo
told
analysts
the
volume
performance
was
due
to
the
focus
on
servicing
Wells
Fargo’s
customers,
reflecting
a
“stronger
market.”
However,
the
mortgage
market
continued
to
be
weak
compared
to
historical
levels
due
to
higher
rates,
he
said. 

“We
continue
to
reduce
headcount,
which
has
declined
49%
since
the
end
of
2022
as
we
have
simplified
the
business
and
reduced
the
amount
of
third-party
mortgage
loans
serviced
for
others
by
33%
from
the
end
of
2022,”
Santomassimo
said. 

Meanwhile,
JPMorgan’s
home
lending
revenue
totaled
$1.25
billion
in
Q2,
a
4%
increase
from
the
prior
quarter
but
5%
below
Q2
2024.
Servicing
revenue
rose
to
$196
million,
up
from
$153
million
in
Q1
and
$189
million
a
year
earlier.

JPMorgan
CFO
Jeremy
Barnum
told
analysts
during
an
earnings
call
that
bank
executives
“continue
to
struggle
to
see
signs
of
weakness”
in
consumption. 

“The
consumer
basically
seems
to
be
fine.
Now,
if
you
look
at

indicators
of
stress,
not
surprisingly,
you
see
a
little
bit
more
stress
in
the
lower
income
bands
than
you
see
in
the
higher
income
bands,”
Barnum
said. 

Gain-on-sale
(GOS)
margins
fell
short
of
analyst
expectations.
JPMorgan’s
GOS
margin
declined
five
basis
points
to
112
bps.
Wells
Fargo
saw
a
sharper
drop,
with
margins
falling
to
45
bps—down
45
bps
from
Q1.
“But,
given
Wells
Fargo’s
relatively
small
market
share,
we
wouldn’t
see
this
as
a
read-through
to
the
market,”
KBW
analysts
said. 

What’s
ahead
for
the
mortgage
market

Overall,
Wells
Fargo
delivered
a
$5.5
billion
profit
in
Q2,
compared
to
$4.9
billion
in
the
same
quarter
of
2024.
At
JPMorgan,
the
$15
billion
net
income
in
the
second
quarter
was
higher
than
the
$14.6
billion
in
Q1
2025
but
lower
than
the
$18
billion
in
Q2
2024.   

Looking
forward,

Jamie
Dimon,
the
head
of
JPMorgan,
said
in
a
statement
that,
“The
finalization
of
tax
reform
and
potential
deregulation
are
positive
for
the
economic
outlook,
however,
significant
risks
persist
–
including
from
tariffs
and
trade
uncertainty,
worsening
geopolitical
conditions,
high
fiscal
deficits
and
elevated
asset
prices.”  

Dimon
told
analysts
that
regulators
need
to
“take
a
step
back,”
mentioning
mortgages
and
securitization
in
the
context
of
streamlining
costs. 

“We
need
a
more
active
securitization
market,
and
all
these
things
could
reduce
the
actual
cost
of
making
a
loan.
I
pointed
out
in
the
past
that
mortgages
probably
cost
30
or
40
or
50
basis
points
more
because
of
excessive
securitization,
origination
and
servicing
requirements.
Those
could
be
changed
and
would
dramatically
help
mortgages,
particularly
for
low
income
individuals
and
we’ve
just
have
failed
to
do
it
for
10
years
and
it
wouldn’t
create
any
additional
risk.” 

At
Wells
Fargo,
CEO
Charlie
Scharf
mentioned
in
a
statement
the

“lifting
of
the
asset
cap
in
the
second
quarter
marked
a
pivotal
milestone.”
To
analysts,
he
mentioned
that
the
bank
will
be
“more
aggressive
in
our
pursuit
of
consumer
and
corporate
deposits
and
we
will
selectively
look
to
grow
loans,
though
we
will
be
cautious
during
periods
of
economic
uncertainty.”

“In
addition
to
the
lifting
of
the
asset
cap,
we
expect
that
changes
in
both
the
regulatory
and
supervisory
environment
will
allow
us
to
compete
more
effectively,”
Scharf
added.