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» VISIT US ONLINE @ DSNEWS.COM 25 CHASE'S MORTGAGE BANKING REVENUE CLIMBS AFTER CHANGES While JPMorgan Chase's net income for the second quarter stayed relatively flat from a year ago, mortgage banking income took an upward turn, according to JPMorgan Chase's Q2 Earnings Statement. e bank has made some significant changes in its Mortgage Banking segment in the last few months. In December 2015, Mike Weinbach moved from the position of CEO of Mortgage Servicing to CEO of the Mortgage Banking Division. In January, Peter Muriungi was named as Weinbach's replacement as CEO of the Mortgage Servicing division. e changes appear to be paying off so far in terms of net revenue. e Chase mortgage banking new revenue climbed by 5 percent over-the-year in Q2, from $1.83 billion up to $1.92 billion driven by portfolio growth and higher production revenue. e gains were largely offset, however, by lower servicing revenue. e income for the consumer & community banking segment in Q2 was $2.7 billion, an increase of 5 percent over-the-year. "JPMorgan Chase continued to perform well in all of our major businesses. We saw strong underlying performance with record consumer deposits (up 10 percent), credit card sales volume (up 8 percent), merchant processing volume (up 13 percent) and broad core loan growth (up 16 percent)—particularly in mortgage and commercial real estate. Outside of energy, both wholesale and consumer credit quality remained very good," said Jamie Dimon, Chairman and CEO of JPMorgan Chase. e bank's overall net income for Q2, $62.7 billion ($1.55 per share), was largely unchanged from the same quarter in 2015. It represented an increase from $5.52 billion in the first quarter of 2016. Just three weeks ago, the Federal Reserve determined JPMorgan Chase to be well- capitalized when the Dodd-Frank Act Stress Test (DFAST) was applied, and the Fed also did not object to JPMorgan Chase's capital plan under the Comprehensive Capital Analysis Review (CCAR), announced at the end of June. e DFAST test reported JPMorgan Chase's actual common equity tier 1 capital ratio—a measure of the bank's financial strength that compares its core equity capital and its total risk-weighted assets—to be 12 percent at the end of the fourth quarter in 2015. By comparison, the Fed estimated that the bank's common equity tier 1 capital ratio in a severely adverse economic scenario would be 8.3 percent. "We were also pleased to increase capital return in the quarter and to receive a non- objection from the Federal Reserve for our new capital distribution plan that includes a meaningful increase in our equity buyback program," Dimon said. GAP WIDENS BETWEEN HOMEBUYER AND RENTER MORALE Results from the Housing Opportunities and Market Experience (HOME) survey conducted through the National Association of Realtors (NAR) show roughly three-quarters of surveyed households still believe now is a good time to buy a home, but there's a significant gap in morale between homeowners and renters, and about half of those with student debts are unsure about taking on a mortgage. NAR's survey results showed the homeowners and renters who believe now is a good time to buy are sitting at 82 percent and 62 percent, respectively, as of March 2015. e share of homeowners has remained at a consistent rate since December 2015. e share of renters, though, has fallen 6 percent, and renters under the age of 35 were the least confident that now is a good time to buy. ose surveyed in the West were also found to have the lowest percent believing now is a good time to buy. Lawrence Yun, NAR Chief Economist, says the survey brings to focus the continuing gap of buyer confidence between current homeowners and renters. "Existing-home prices surpassed their all-time peak this spring and have climbed on average over 5 percent nationally through the first five months of the year and even faster in areas with severe supply shortages," he said. "Most homeowners appear to realize that if they're ready to sell, they'll likely find a buyer rather quickly and be able to use the sizeable equity they've accumulated in recent years towards their next home purchase. Meanwhile, renters interested in buying continue to face minimal choices, strong competition and home prices growing faster than their incomes." Additionally, the survey showed that having student debt is causing many potential buyers to be uneasy about acquiring additional debt. Around two-thirds of non-homeowners as well as half the respondents under 35 with student debt stated they didn't feel confident also taking on a mortgage. Furthermore, this subset didn't believe they'd be able to qualify for a mortgage if they applied. "It's becoming very evident from this survey and our research released in June that the financial and emotional impact of repaying student debt is contributing to a delay in purchasing a home for many would-be buyers," added Yun. "At a time of quickly rising rents, mortgage rates at all-time lows and increasing housing wealth, a lot of young adults in their prime buying years are struggling to enter the market and are ultimately missing out on the stability and wealth accumulation that owning a home can provide." With regard to selling, because of strong price growth seen in most of the country and homes selling much quicker than years past, 61 percent of current homeowners surveyed believe it is a good time to sell. is is a 5 percent increase from the first quarter of this year. NAR found that those surveyed in the West were again the most likely to think now is a good time to sell. About 93 percent of respondents surveyed about their views on home prices in their community for the next six months believed that prices will stay the same or rise, a slight increase from last quarter's 91 percent. Respondents from the West, both renters and those living in urban areas, are most likely to believe prices will go up in their communities. "More homeowners acknowledging this pent-up demand may perhaps mean we begin to see more supply come online in the near future," Yun said. REO inventory fell 9 percent during the first quarter this year to 66,277, as property dispositions continued to outpace property acquisitions according to the FHFA KNOW THIS

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