From Stocks to Watch Today (yesterday, sorry):
Analysts and investors began to zero in on the problem spots in JPMorgan Chase’s (JPM) first quarter results on Wednesday and they found particular cause for concern in the banks’ retail financial services, which lends to consumers and small businesses. The division posted a $208 million loss, driven by a $1.1 billion write-down in its mortgage servicing rights (MSR) business to reflect increased servicing costs.
“JPM’s decision to write down its MSRs increases the probability that other banks, notably Bank of America (BAC) and Citigroup (C) in our coverage universe, will follow suit,” wrote Sandler O’Neill analyst Jeff Harte. “Expenses also included a $650M reserve for the future estimated costs of foreclosures.”
Mortgage loan originations also dropped 29% quarter over quarter. Average loans in the quarter fell on a quarter over quarter and year over year basis....MORE
