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Q2 Wrap-Up: Mortgage Earnings Lift Off Low Base

rates-riseA small resurgence in home purchase lending in the second quarter helped drive up mortgage earnings at some of the nation's top firms, but the picture still looks sparse overall.

With the second-quarter earnings season mostly done, financial services firm Keefe, Bruyette & Woods (KBW) reports that mortgage bankers tracked in its coverage—including bigger names like Wells Fargo and JPMorgan Chase as well as a handful of smaller companies—saw a 22 percent increase in volumes from the first quarter to the second.

"We view the mortgage results for the banks that have already reported 2Q earnings as largely in line with expectations," KBW commented.

With market share shifting from banks to non-bank lenders, KBW estimates industry volume was likely up by nearly a quarter when factoring in those companies not covered in its report.

Mortgage application numbers were also up nearly 26 percent among those companies reporting.

The increase primarily reflected higher purchase volumes, KBW said. As refinance activity has fallen off from its recent boom, the share of purchase activity in the market has steadily grown—though actual origination numbers overall have been unable to make up for the lack of refinances, as evidenced by the nearly 60 percent year-over-year decline in originations in Q2.

Among the banks tracked in KBW's report, Wells Fargo held on to its spot as the top originator in the second quarter, growing its market share nearly 1 percentage point over the year to 43.4 percent.

The next biggest home lender was JPMorgan Chase with a market share of 15.5 percent, down from 18.6 percent last year. Bank of America, U.S. Bancorp, and Citigroup followed with estimated market shares of 10.2 percent, 7.3 percent, and 5.7 percent, respectively.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
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