World Economy

US Banks Gobble Mortgage Business

US Banks Gobble Mortgage BusinessUS Banks Gobble Mortgage Business

Just as mortgage bankers were preparing for the end of a historic boom driven by low interest rates, borrowers have begun knocking at their doors again, Reuters reported. In earnings reports over the past week, JPMorgan Chase & Co JPM.N, Wells Fargo & Co WFC.N, Bank of America Corp and Citigroup Inc C.N said they originated $115 billion worth of new mortgages during the second quarter in their core mortgage operations, an increase of $27 billion, or 30%, over the first quarter. The reason for the sudden burst of business? Mortgage rates have dropped to lows not seen since 2013 after the US Federal Reserve dashed expectations for near-term rate hikes. That has led existing borrowers to try and lock in better rates. New borrowers, meanwhile, have been enticed by low borrowing costs and low down-payment offers.