5 Biggest Banks Admit Mortgage Originations Fell by 21.1% in the Third Quarter

It's no exaggeration to say that the mortgage market is buckling under the pressure of higher interest rates. But while this has been common knowledge for some time now, we didn't know how bad the carnage would be -- that is, until the last few days.

On Friday, the nation's two largest mortgage originators, Wells Fargo and JPMorgan Chase , announced third-quarter earnings. And on Tuesday and Wednesday of this week, Citigroup , Bank of America , and U.S. Bancorp followed suit. Each bank, in turn, provided its mortgage origination volumes.

Bank

Third-Quarter Mortgage Volume (billions)

Quarterly Change (from 2Q13)

Wells Fargo

$80.0

(28.6%)

JPMorgan Chase

$40.5

(17.3%)

Bank of America

$24.4

(9%)

U.S. Bancorp

$22.5

(11.8%)

Citigroup

$14.5

(15.7%)

Total

$181.9

(21.1%)

Source: Company filings.


As you can see, Wells Fargo led the way in terms of both volume and sequential decline, announcing a 28.6% drop compared to the second quarter. JPMorgan was second in both regards followed by Citigroup, U.S. Bancorp, and Bank of America. Altogether, these five lenders, which account for roughly a third of the overall mortgage market, saw home loan volumes, and particularly refinancings, fall by 21.1%.

It's hard to deny that this is bad news. At the same time, it's worth noting that the combined results were better than expected. At an industry conference last month, JPMorgan's chief financial officer, Marianne Lake, said that it and "Fannie, Freddie and the [Mortgage Bankers Association] agree that the volume reduction will be 35% flat."

The point being, while 21.1% is nothing to shake a stick at, things could have been a lot worse.

Uncover the stock Buffett wishes he could buy but can't
It's often assumed that small investors are at a great disadvantage relative to hedge fund managers and other institutional investors. But that's not always true. Bound by multibillion-dollar portfolios and strict bylaws that govern what they can and can't invest in, these giants are often prohibited from tapping the market's greatest stocks until it's too late -- that is, after the stocks have already shot up to large-cap status. In this free report, our analysts identify one such stock that Warren Buffett himself wishes he could buy but is effectively restricted from doing so because of its size. To discover the identity of this stock instantly (and for free!), simply click here now.

The article 5 Biggest Banks Admit Mortgage Originations Fell by 21.1% in the Third Quarter originally appeared on Fool.com.

John Maxfield owns shares of Bank of America. The Motley Fool recommends and owns shares of Bank of America and Wells Fargo. It also owns shares of Citigroup and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Introduction to ETFs

The basics of Exchange Traded Funds and why ETFs are hot.

View Course »

Bonds for Beginners

Learn about fixed income investments.

View Course »

Add a Comment

*0 / 3000 Character Maximum