Cross-sell, up-sell, mortgages go retail.

From the Record:

Big bank gives thanks

When executives at the Iselin headquarters of Chase Home Lending count their blessings on Thanksgiving, they could include the collapse of the subprime market. The financial debacle is helping the mortgage-lending division of JPMorgan Chase & Co. and other large bank lenders gain market share.

Chase Home Lending increased third-quarter originations by 35 percent to $39.2 billion, compared with the year-earlier period.

Tom Kelly, a senior vice president at Chase, cites the subprime meltdown, which has caused the demise of more than 100 mortgage companies, for this year’s growth spurt.

“There is more opportunity to make loans because other people aren’t,” he said in a recent interview.

Chase’s U.S. market share of residential mortgages and home-equity loans climbed to 9 percent from 5.7 percent over the past year, the largest increase of any of the top 10 lenders, according to statistics from Inside Mortgage Finance, a trade publication. Meanwhile, the lender is adding retail bank branches in New Jersey, and is increasing its mortgage-lending sales staff here, Kelly said.

James Dimon, chief executive officer at JPMorgan Chase, said in a conference call with investors in October that he planned to expand in areas including investment banking and retail mortgages. “Our mortgage share in both home equity and prime mortgage and subprime is going to go up pretty substantially.” he said.

Mortgage loan originations industrywide are down significantly this year amid a slowdown in home sales, flat or declining home prices and credit tightening. The Mortgage Bankers Association predicts mortgage volume will be down 15 percent in 2007.

But the playing field is more open for big banks, with fewer competitors in the market. Non-bank lenders such as New York City-based commercial lender CIT Group, a large employer in Livingston, exited the business amid heavy losses. Another, American Home Mortgage, from Melville, N.Y., filed for Chapter 11 protection in August. Smaller mortgage banking firms, such as Teaneck-based First Financial Equities, have closed all or most of their loan sales offices.

“Bank-owned institutions have been well-positioned to take advantage of [the subprime meltdown],” said Keith T. Gumbinger, vice president of HSH Associates, a publisher of mortgage and consumer loan information in Butler. Chase, Bank of America and Wells Fargo are among the large banks that are expected to gain market share in their mortgage businesses, he said.

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