The correspondent channel dragged quarterly home-loan fundings down at JPMorgan Chase &Â Co.
The volume of residential originations was $36.2 billion, sinking from $50.8 billion in the fourth-quarter 2010, according to first-quarter earnings data released Wednesday. But production rose above the $31.7 billion closed in the first quarter of last year.
Chase also originated $0.2 billion in home-equity loans, less than $0.3 billion three months earlier and a year earlier.
The retail channel dominated the New York-based company’s activity, though volume eased to $21.0 billion from the prior period’s $22.9 billion. Wholesale fundings slipped to $0.2 billion from $0.3 billion, and negotiated transactions were cut to $1.5 billion from $2.1 billion.
The overall poor performance was the result of a nearly one-half drop in correspondent originations. Chase said the channel funded just $13.5 billion, sinking from $25.5 billion in the final period of last year.
If new applications are any indication, second-quarter business is likely to be even worse; applications fell to $45.2 billion from the fourth quarter’s $57.7 billion. The decline was concentrated in correspondent applications, which fell to $13.6 billion from $24.9 billion.
The third-party servicing portfolio closed out last month at $955.0 billion, lower than $967.5 billion at the end of the fourth quarter and $1.0750 trillion on March 31, 2010.
In addition, Chased owned $109.3 billion in home-equity loans, $90.0 billion in prime mortgages and $16.1 billion in subprime mortgages.
Chase finished March with $3.2 billion in repurchase reserves, higher than $3.0 billion at the end of December.
While the retail financial services unit demonstrated “good underlying performance,” the results were offset by elevated credit costs and other mortgage-related costs, JPMorgan Chief Executive Officer Jamie Dimon said in the announcement.
Overall earnings at JPMorgan Chase &Â Co. climbed to $5.6 billion from $4.8 billion three months earlier and $3.3 billion a year earlier.
Headcount at the retail financial services division grew to 123,550 from 121,876 at the end of last year. A year prior, there were 112,616 employees.
Chase operated 5,292 branches, more than 5,268 as of Dec. 31, 2010.
