By Robin Sidel and Shayndi Raice | The Wall Street Journal
A rise in interest rates is slamming homeowners’ demand for mortgages, prompting large and midsize banks to cut jobs and warn investors of declining profitability in the home-loan business.
Wells Fargo WFC +0.70% & Co., the nation’s largest mortgage company by loan value, on Monday told investors at a conference that it expects mortgage originations to drop nearly 30% in the third quarter to roughly $80 billion, down from $112 billion in the second quarter.
JPM +0.57% J.P. Morgan Chase JPM +0.57% & Co., the largest U.S. bank as measured by assets, said during the conference sponsored by Barclays BARC.LN +2.39% PLC that it expects to lose money on its mortgage-origination business in the second half of the year. On Aug. 29, Bank of America Corp., BAC +0.83% notified about 2,100 employees that they were being let go largely due to a decline in refinancing activity, said a bank spokesman.
