insideyournwa.com

Chase boosts mortgage originations 35% in third quarter
Company?s strength, capital helps keep mortgages flowing

NEW YORK, Oct. 31, 2007 — Chase announced today that it originated
$39.2 billion in mortgages in the third quarter, ending Sept. 30 — up
35 percent from a year earlier — as it helps fill consumers? need for
home loans. For the first nine months of 2007, Chase?s originations are
up 33.6 percent to $119 billion.
That?s good news for consumers as the mortgage industry continues to
retrench and fewer options exist for obtaining or refinancing a
mortgage.
“At Chase, making mortgages is a key business,? said David Lowman, CEO
of JPMorgan Chase?s Home Lending business. ?We are using our financial
strength to lend to qualified borrowers as they seek the American Dream
of homeownership. We are remaining disciplined in our underwriting to
make home loans that borrowers can afford today ? and for the long
term.?
Chase?s increased lending ? and competitors? pullbacks ? boosted Chase?s
market share of mortgages and home equity to 9 percent in the third
quarter, up dramatically from 5.7 percent a year earlier, according to
Inside Mortgage Finance. Chase recorded the largest market-share
increase of any Top 10 lender.
Chase is able to originate a wide range of mortgages and home equity
products because it has the flexibility to fund the loans directly
rather than relying solely on the secondary market. Chase is supported
by the financial strength, capital and liquidity of JPMorgan Chase,
which has $1.5 trillion in assets and $120 billion of stockholders
equity.
Typically, many lenders bundle together a number of similar mortgages to
sell to investors in the secondary market. That replenishes money
available to make more mortgages. Investors have continued to purchase
pools of mortgages of less than $417,000 fitting certain criteria
established by Fannie Mae and Freddie Mac, the key government sponsored
enterprises created for this purpose. But investors have been hesitant
to purchase pools of jumbo (larger than $417,000), Alt-A and other
non-prime mortgages, forcing many lenders to reduce or eliminate their
origination of certain non-conforming loans.
That has created opportunities for financially strong companies such as
Chase to continue to expand their businesses to meet consumer needs,
particularly those needing jumbo loans.
During the last year, Chase has increased its mortgage sales force to
more than 5,000. It also has made a number of changes to help borrowers
understand and sustain homeownership, including:
- Developing a new upfront disclosure in a simple format. Consumers
now can compare important product features for traditional as well as
non-traditional mortgages, including more information on how an
adjustable-rate feature can affect the monthly payment.

- Rewarding consumers who complete a mortgage counseling class through
an approved nonprofit counseling organization with a discount on
mortgage insurance premiums (often required with a down payment of less
than 20 percent).
- Distributing a homeowner education CD in English or Spanish to
provide purchasers home-buying tips.

- Tightening credit standards, such as making adjustments to
acknowledge declining home values in certain markets and reducing the
use of high loan-to-value ratios and stated-income products.

- Employing underwriting guidelines that require borrowers to
demonstrate their ability to handle increases in interest rates on
non-traditional mortgages.

- Requiring an initial fixed rate for at least five years on
adjustable-rate mortgages for non-prime borrowers to reduce payment
shock risk.

About Chase
Chase is the U.S. consumer and commercial banking brand of JPMorgan
Chase & Co. (NYSE: JPM). Chase has 150 million credit cards issued and
serves consumers and small businesses through nearly than 3,100 bank
branches, 8,900 ATMs and 280 mortgage offices as well as through
relationships with 15,000 auto dealerships and 4,300 schools and
universities. It also serves more than 30,000 commercial banking
clients, including corporations, municipalities, financial institutions
and not-for-profit entities. More information about Chase is available
at www.chase.com.