Big Banks Exceed Q2 Mortgage Origination Expectations

Major U.S. banks reported a 32% average increase in mortgage origination volume for the second quarter of 2026, significantly exceeding analyst expectations.

This performance contrasts sharply with earlier forecasts, with BTIG analysts noting that the 32% increase surpassed their own expectation of a 3% rise and industry predictions of 6%. The banks' collective 30% increase also outpaced the 11% growth in the broader industry's mortgage-backed securities issuance during the same period. Analysts from Keefe, Bruyette & Woods (KBW) acknowledged the strong volume but questioned whether this growth represented an overall market expansion or a market share gain by banks at the expense of nonbank lenders.

Specific institutions demonstrated substantial gains. JPMorgan Chase originated $17.2 billion in mortgages between April and June, a 26% quarter-over-quarter increase, with its retail channel contributing $10.6 billion and correspondent business adding $6.6 billion. Wells Fargo saw its mortgage production jump 43% to $9 billion, driven solely by its retail branch network. Bank of America originated $8.2 billion in mortgages, up 28.4% from the first quarter, and also reported $2.9 billion in home equity loans, a 17.7% increase.

Alastair Borthwick, Bank of America's chief financial officer, commented that the combined balances of first- and second-lien mortgages remained stable, reflecting high interest rates, and noted the ninth consecutive quarter of average home equity growth. While Bank of America and Wells Fargo did not disclose their gain-on-sale (GOS) margins, JPMorgan's margins declined by 44 basis points to 85 basis points, leading to a 17% drop in production revenue quarter-over-quarter. This revenue decline was considered worse than anticipated given the seasonally strong quarter and rising average mortgage rates.