Wells Fargo & Co (WFC), JPMorgan Chase & Co (JPM), EverBank Financial Corp (EVER): Want a Cheaper Mortgage? Buy a Bigger House

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In the first quarter of this year, for instance, Wells Fargo & Co (NYSE:WFC), the nation’s largest mortgage originator, retained $3.4 billion in new conforming mortgages on its balance sheet as opposed to passing them onto the GSEs. And in the second quarter, one of its main areas of growth was in nonconforming mortgages.

In addition, the market for private-label securitizations collateralized by jumbo mortgages is finally getting back up and going again — though haltingly so. Earlier this year, JPMorgan Chase & Co (NYSE:JPM) and EverBank Financial Corp (NYSE:EVER) teamed up to manufacture and then market a $1 billion offering of this sort.

As my colleague Amanda Alix noted at the time, “Although these MBSes are not backed by any government agency, ratings agencies consider them less risky than you might think — for a couple of reasons. Most of these loans are made to wealthy people with high credit scores, and down payments are typically high, around 65%.”

The takeaway here is simply that the mortgage market remains exceptionally volatile and unpredictable — though, at least in terms of the latter, what market isn’t? While I believe rates are bound to increase over the longer term, it’s anybody’s guess what will happen in the meantime.

The article Want a Cheaper Mortgage? Buy a Bigger House originally appeared on Fool.com is written by John Maxfield.

John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of JPMorgan Chase and (NYSE:JPM) Wells Fargo.

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