JPMorgan Chase & Co. (JPM), Wells Fargo & Co (WFC) – Mortgages and Housing: We’re Back in Business!

We got next

It’s not just the big banks profiting from this home-building boom, some regional firms are capitalizing. Be on the lookout for Stonegate Mortgage — the regional lender is set to go public soon. Stonegate Mortgage has filed with regulators for an initial public offering. This firm is growing at a rapid rate — the Indianapolis firm already does business in more than 30 states. Stonegate raised $115 million in a private offering in May of 2013. These funds will be used to fuel profitable non-government backed jumbo loans and to build more servicing contracts. Over half (65%) of Stonegate’s business is acquiring loans from banks, brokers, other mortgage companies, and financial institutions. Keep Stonegate Mortgage on your radar — Stonegate’s revenue grew from $15 million in 2010 to $95 million in 2012.

Trading places

As American home buyers ramp up to upgrade or invest, the home-building sector is hot. Look for home-building firms to grow — we may start see some M&A activity in this sector. Banks will see profits and continue to run with the bull market. With no Billy Ray Valentine or Louis Winthorpe III to foil them, American financials are ballin’ big-time — and investors are rewarding banks. But home builders and smaller regional banks and mortgage firms may be the real winners in this second housing boom. It seems 2008 is a distant memory to investors, the banking industry, home builders, and home buyers. You can almost hear banking bellwethers unthrifty whisper to Wall Street, “Mortimer, we’re back in business!” Who needs orange futures when you have net charge-offs and pre-tax pre-provision profits? Back in business, indeed.

The article Mortgages and Housing: We’re Back in Business! originally appeared on Fool.com and is written by John Moore.

John Moore has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of JPMorgan Chase & Co (NYSE:JPM). and Wells Fargo. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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