Big banks are urging the Trump administration to simplify regulations relating to mortgage loan origination, servicing, and securitization in the hope that these reforms may lower costs and boost lending activity in the struggling US housing market.
“In terms of mortgages, reducing unnecessary regulations would decrease homeownership costs,” JPMorgan Chase (JPM) CEO Jamie Dimon wrote in his annual shareholder letter.
“Streamlining loan origination and servicing standards, reducing capital requirements and simplifying securitization rules would reduce the cost of mortgages without making them riskier. These simple reforms could lower the cost of mortgages by 70–80 basis points.”
This push for reform comes as JPMorgan’s mortgage volume fell to $11.2 billion in the first quarter ending March 31, down from $14.2 billion in the fourth quarter of 2024. Meanwhile, home lending from the bank’s retail channel fell to $9.4 billion from $12.1 billion in the fourth quarter of 2024.
Other banks have also struck a similar tone during recent conference calls following quarterly earnings.
Bank of America (BAC) CEO Brian Moynihan told investors during the company’s first quarter earnings call this week that he is hopeful for change as new policymakers take office.
“It’s critically important that we get this rebalance,” Moynihan said. “Sometimes the regulation gets in the way of that.” At Bank of America, home lending held steady at $254 billion in the first quarter, unchanged from the previous quarter.
Wells Fargo (WFC) CEO Charles Scharf echoed Dimon’s sentiment, telling analysts last week that the bank supports the administration’s deregulatory push. Scharf said the proposed changes would allow “more loans, take more deposits, and provide more liquidity to the markets while preserving robust regulatory oversight.”
Wells Fargo’s mortgage volume fell to $4.4 billion in the first quarter ending March 31, down from $5.9 billion the previous quarter, further underscoring the broader slowdown in housing financing activity.
Data from the National Association of Realtors showed pending home sales, a forward looking indicator of home sales based on contract signings, grew 2% in February. However, pending transactions are down 3.6% year over year, underscoring the ongoing challenges in the housing market.
The average rate on a 30-year fixed mortgage stood at 6.92% as of last week, not far from the highest levels seen over the last several years.
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