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Santomassimo noted a 52% year-over-year decline in the bank’s residential lending revenue, “driven by lower mortgage originations and gain on sale margins as well as lower revenue from the resecuritization of loans purchased from securitization pools.”
“While the mortgage market adjusts to lower volumes, we expect it to remain challenging in the near term, and it’s possible that we have a further decline in the mortgage banking revenue in the fourth quarter when originations are seasonally slower,” he added. “We continue to remove excess capacity to align with the reduced demand and expect these adjustments will continue over the next couple of quarters.”
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Meanwhile, JPMorgan experienced a 45.5% quarter-over-quarter decline in its mortgage originations, funding $15.2 billion in residential loans in Q3. Compared to the third quarter of 2021, the firm’s mortgage production was down by 67%.
“The only significant item this quarter was discretionary net investment securities losses in corporate of $959 million as a result of repositioning the portfolio by selling US treasuries and mortgages,” said Jeremy Barnum, chief financial officer of JPMorgan Chase. “Our strong results this quarter reflect the resilience of the franchise in a dynamic environment.”
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