Quarter-to-quarter mortgage production at both JPMorgan Chase and Wells Fargo fell by about 2.5 times more than what the Mortgage Bankers Association is predicting for the industry, a Keefe, Bruyette & Woods flash note commented.

The MBA's March forecast called for $1.46 trillion in volume for the first quarter, with just a $21 billion decline in purchase but $83 billion drop in refinance activity. Recent data from Optimal Blue found purchase rate lock activity higher in the first quarter, but not all of those loans would have closed during the period.

By comparison, the fourth quarter, helped by a declining interest rate environment, was stronger than usual, with industry volume actually topping the third quarter, at $1.57 trillion versus just under $1.5 trillion.

The read-through publicly traded non-banks should watch

At Chase, the volume mix was 64% in the higher-margin retail channel, versus 65% in the fourth quarter, the KBW report noted. But originations in the retail channel were 16% lower, while for correspondent, it was off by 11%.

Chase's gain-on-sale was up 12 basis points to 130 basis points. Starting with this quarter, Wells Fargo no longer provides this information, George noted.

Regarding the margins, "we think this was probably modestly better than expected given the seasonally weak quarter and slowdown in volumes and increase in mortgage rates in March," George said.

MBA forecast aside, the quarter for both banks was largely in line with expectations. Although volume was light, the gain-on-sale was slightly better versus what KBW was forecasting.

KBW is expecting "a neutral reaction" for the non-bank lenders it covers, he said. Stock price multiples "remain depressed after the selloff since the beginning of February."

Chase's first quarter mortgage activities

For the first quarter, Chase had total volume of $13.7 billion, of which $8.7 billion came from retail. This compared with $16 billion in the fourth quarter ($10.4 billion retail) and $9.4 billion in the first quarter of 2025 ($5.5 billion retail).

As of March 31, Chase serviced $658.4 billion, down from $661.9 billion three months prior and $661.6 billion one year earlier.

Chase earned $303 million in mortgage fees and related income, with $178 million coming from production revenue; net servicing revenue was $125 million.

This compared with $344 million in the fourth quarter ($188 million production and $156 million net servicing). For the same period in 2025, Chase earned $263 million in the mortgage segment, consisting of $110 million of production revenue and $153 million in net servicing revenue.

How Wells Fargo's mortgage business did in the quarter

Wells Fargo's first quarter production, all of it retail, was $6.3 billion. This compares with $7.5 billion in the fourth quarter and $4.4 billion a year ago.

It now services $386.6 billion, down from $397 billion on Dec. 31, 2025 and $471.1 billion on March 31, 2024.

Noninterest income from mortgage banking at Wells was $201 million, down from $322 million for the prior quarter. A year ago, it was $332 million.