Dimon Says JPMorgan Is Still 'Getting Killed' on Mortgages

NEW YORK (TheStreet) -- JPMorgan Chase (JPM) reported solid loan growth in the fourth quarter, driven by a jump in business lending.

Total loans rose 4% quarter-on-quarter, with a 17% increase in middle-market loans, a 73% jump in trade loans and a 5% 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 (FNMA) and Freddie Mac (FMCC) 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 their own book, it would be a sign that they were confident about the profitability of mortgage loans. To which Dimon snapped back, "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. Everyone was seeing each other, refinancing fees were high, banks were tightening underwriting standards because they are worries about putback risk, higher capital rules, a poor residential mortgage backed securities markets, were some of the issues he listed as problems hindering the mortgage market.

--Written by Shanthi Bharatwaj in New York



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