The two largest U.S. home lenders are feeling the bite of competition from smaller firms as mortgage originations tumble at the fastest rate since 2011, Bloomberg News reported yesterday. New loans at Wells Fargo & Co. fell 38 percent to $50 billion in the fourth quarter from the third quarter, the bank said on Tuesday. At JPMorgan Chase & Co. originations decreased 42 percent to $23.3 billion, outpacing the 27 percent fourth-quarter drop forecast by the Mortgage Bankers Association for the industry. Big banks are facing dual challenges of increased competition and a plunge in home loan refinancing after the Federal Reserve said that it planned to reduce monthly bond purchases, which sent mortgage rates soaring. Smaller lenders are helped because the market is shifting to one led by mortgages for home purchases, favoring firms that can capture the buyers’ attention, said Clifford Rossi, a former Citigroup Inc. risk manager who now teaches at the University of Maryland’s Robert H. Smith School of Business.
