JPMorgan Chase, Wells Fargo see mortgage volumes surge in Q2 (but not profits)

Meanwhile, Wells Fargo reported $7.4 billion in mortgage originations, a 68% jump from the previous quarter and a 40% increase from the same period in 2024. 

The Mortgage Bankers Association (MBA) had forecast a 43% quarterly gain for the industry, according to a report by Keefe, Bruyette and Woods (KBW) analysts. 

“While the volume growth was expected, the lower margins despite higher volumes were slightly below expectations but could have been driven by interest rate volatility in the quarter and its impact on pipeline hedging,” the analysts wrote. 

On the servicing side, JPMorgan’s mortgage servicing rights (MSR) portfolio hit $9 billion in Q2 2025, up from $8.8 billion a year earlier. Wells Fargo’s servicing book stood at $6.4 billion, down 2% quarter over quarter and 9% year over year by unpaid principal balance (UPB). 

Mortgage earnings 

Wells Fargo posted $821 million in home lending revenue in Q2, down 5% from Q1 and slightly below the $823 million level in Q2 2024. The bank cited “lower mortgage servicing income from portfolio run-off and sales.” 

Net servicing income dropped 25% from Q1 to $136 million, though it was up 53% year over year. Mortgage banking non-interest income fell to $230 million from $332 million in Q1 and $243 million a year ago.

Chief financial officer Mike Santomassimo told analysts the volume performance was due to the focus on servicing Wells Fargo’s customers, reflecting a “stronger market.” However, the mortgage market continued to be weak compared to historical levels due to higher rates, he said. 

“We continue to reduce headcount, which has declined 49% since the end of 2022 as we have simplified the business and reduced the amount of third-party mortgage loans serviced for others by 33% from the end of 2022,” Santomassimo said. 

Meanwhile, JPMorgan’s home lending revenue totaled $1.25 billion in Q2, a 4% increase from the prior quarter but 5% below Q2 2024. Servicing revenue rose to $196 million, up from $153 million in Q1 and $189 million a year earlier.

JPMorgan CFO Jeremy Barnum told analysts during an earnings call that bank executives “continue to struggle to see signs of weakness” in consumption. 

“The consumer basically seems to be fine. Now, if you look at indicators of stress, not surprisingly, you see a little bit more stress in the lower income bands than you see in the higher income bands,” Barnum said. 

Gain-on-sale (GOS) margins fell short of analyst expectations. JPMorgan’s GOS margin declined five basis points to 112 bps. Wells Fargo saw a sharper drop, with margins falling to 45 bps—down 45 bps from Q1. “But, given Wells Fargo’s relatively small market share, we wouldn’t see this as a read-through to the market,” KBW analysts said. 

What’s ahead for the mortgage market

Overall, Wells Fargo delivered a $5.5 billion profit in Q2, compared to $4.9 billion in the same quarter of 2024. At JPMorgan, the $15 billion net income in the second quarter was higher than the $14.6 billion in Q1 2025 but lower than the $18 billion in Q2 2024.   

Looking forward, Jamie Dimon, the head of JPMorgan, said in a statement that, “The finalization of tax reform and potential deregulation are positive for the economic outlook, however, significant risks persist – including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices.”  

Dimon told analysts that regulators need to “take a step back,” mentioning mortgages and securitization in the context of streamlining costs. 

“We need a more active securitization market, and all these things could reduce the actual cost of making a loan. I pointed out in the past that mortgages probably cost 30 or 40 or 50 basis points more because of excessive securitization, origination and servicing requirements. Those could be changed and would dramatically help mortgages, particularly for low income individuals and we’ve just have failed to do it for 10 years and it wouldn’t create any additional risk.” 

At Wells Fargo, CEO Charlie Scharf mentioned in a statement the “lifting of the asset cap in the second quarter marked a pivotal milestone.” To analysts, he mentioned that the bank will be “more aggressive in our pursuit of consumer and corporate deposits and we will selectively look to grow loans, though we will be cautious during periods of economic uncertainty.”

“In addition to the lifting of the asset cap, we expect that changes in both the regulatory and supervisory environment will allow us to compete more effectively,” Scharf added.