A year ago, JPMorgan Chase & Co. had just set a U.S. banking profit record, but the leaders of one of its most quintessential businesses were far from riding high…. The big banks have struggled to shift costs amid a decline in volumes, and don’t originate as many mortgages through government programs, which tend to be more lucrative, said Jim Cameron, senior partner at STRATMOR Group, a mortgage-industry advisory firm. “It’s like driving a supertanker — large banks have significant overhead and they’re not as nimble as smaller non-bank lenders,” Cameron said. By 2018, as rates were rising, the cost to originate a mortgage for the average large bank through retail channels had risen to a record $13,628 per loan, figures from STRATMOR show. Big banks lost $4,803 for every mortgage they originated and sold directly to consumers that year, while non-banks generated a profit of $376 per loan.
A lack of marketing focus, inability to quickly pivot when the market changes and ineffective technology spending have all resulted in big banks not doing as well as they should, according to STRATMOR.
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