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Dimon: JPMorgan Is Still 'Getting Killed' on Mortgages

Shanthi Bharatwaj|Reporter

JPMorgan Chase reported solid loan growth in the fourth quarter, driven by a jump in business lending.

Total loans rose 4 percent quarter-on-quarter, with a 17 percent increase in middle-market loans, a 73 percent jump in trade loans and a 5 percent increase in business banking loans.

One area where the bank is still not seeing any pickup in lending — mortgages.

That is partly because the bank had a $30 billion run-off portfolio during the quarter.

CEO Jamie Dimon also pointed out during a media conference call that the bank continues to sell a majority of its home loans to Fannie Mae and Freddie Mac because they still do not consider it profitable to carry most home loans on their own book.

One reporter pointed out that if JPMorgan were to hold more mortgages on its own books, it would be a sign that the company was confident about the profitability of mortgage loans.

To which Dimon snapped, "We are not making a profit on mortgages. We are getting killed in mortgages, in case you haven't noticed."

The CEO said that all the housing policies that were out there were contradictory to a healthy mortgage market.

High refinancing fees, banks tightening underwriting standards because they are worries about putback risk, higher capital rules, and a poor residential mortgage-backed securities markets were some of the issues he listed as problems hindering the mortgage market.

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