Key facts
- Big banks' Q2 mortgage origination volume increased by an average of 32% quarter-over-quarter.
- This volume surpassed analyst expectations of a 3% increase and industry forecasts of 6%.
- JPMorgan Chase originated $17.2 billion, Wells Fargo $9 billion, and Bank of America $8.2 billion in mortgages.
- JPMorgan's gain-on-sale margins declined, impacting production revenue.
- Wells Fargo and JPMorgan Chase saw decreases in their mortgage servicing portfolios.
Major U.S. banks significantly surpassed expectations for mortgage origination volume in the second quarter of 2026, with an average increase of 32% compared to the previous quarter. This strong performance offers a potential positive sign for nonbank lenders who are set to report their earnings soon.
Analysts from BTIG observed that the banks' Q2 volumes were considerably higher than their own 3% increase expectation and industry forecasts of 6%. Keefe, Bruyette & Woods (KBW) analysts noted that while volume was up, it remains uncertain whether this reflects overall industry growth or if banks are capturing market share from nonbank lenders.
JPMorgan Chase originated $17.2 billion in mortgages during the second quarter, a 26% increase from the prior period, with its retail channel contributing $10.6 billion and correspondent business $6.6 billion. Wells Fargo reported $9 billion in mortgage production, a 43% jump driven by its retail branch network. Bank of America originated $8.2 billion in mortgages, up 28.4% from Q1, alongside $2.9 billion in home equity loans.
Bank of America's CFO, Alastair Borthwick, stated that combined first- and second-lien mortgage balances remained stable due to elevated rates, with home equity growth continuing for the ninth consecutive quarter. Although Bank of America and Wells Fargo do not disclose gain-on-sale (GOS) margins, JPMorgan's margins declined by 44 basis points to 85 bps, leading to a 17% drop in production revenue. KBW analysts suggested this decline might have been worse than anticipated, potentially due to pipeline hedge losses or one-time items.
In the servicing sector, Wells Fargo's third-party mortgages serviced totaled $361.4 billion, a 7% decrease quarter-over-quarter, as the bank continues to scale back its presence in this area. JPMorgan Chase's servicing portfolio saw a smaller dip of 1% to $652.8 billion. Wells Fargo's CFO, Michael Santomassimo, noted that home lending revenue decreased 7% year-over-year due to lower loan balances, but the rate of reduction has slowed, with balances stable from Q1. He also highlighted a 21% year-over-year reduction in third-party mortgage loans serviced for others.
Overall, Wells Fargo reported $6.4 billion in net income for Q2, an increase from $5.4 billion a year ago. Chairman and CEO Charlie Scharf acknowledged concerns about affordability and inflation but pointed to a robust labor market and wage growth. JPMorgan posted $21.1 billion in net income, up from $16.4 billion in Q2 2023. Jamie Dimon, JPMorgan's chairman and CEO, described the U.S. economy as resilient, supported by AI investment and fiscal stimulus, but warned of underlying risks like geopolitical tensions and sticky inflation.
Bank of America's net income for the quarter was $9.1 billion, up from $7.2 billion in the same period last year.