Homeowners give boost to US banks JPMorgan Chase and Wells Fargo said that the housing market was nearing the bottom as homeowners took advantage of record-low interest rates to refinance mortgages, boosting the two US banks" revenues and raising hopes for the economic recovery. Jamie Dimon, JPMorgan's chief executive, said the US housing market was "very close to the bottom," noting that American consumers had reduced their debt burden so that their "debt service ratio is back to where it was 20 years ago." He added: "Businesses are in very good shape. They're earning money, they're very well capitalised, they've got a lot of cash. Wells Fargo said that mortgage applications were up 84 per cent year-on-year, compared with a 33 per cent increase at JPMorgan. The improved numbers at the two biggest US banks by market capitalisation were helped by mortgage rates of below 4 per cent, a revamped government assistance plan for distressed borrowers and Bank of America's retreat from the market. John Stumpf, Wells Fargo's chief executive, said: "When you have ... higher rental rates and lower home values at great financing rates, there's a point in time where the market's going to clear and you're going to see improvement. I think we're getting very close to that tipping point. House prices in the US have fallen more than 34 per cent since their peak in 2006, plunging the country into recession and clobbering the global economy. The much-desired recovery has proven elusive. Wells Fargo said it had issued mortgages worth $188bn, with 15 per cent of loans coming from the government's home affordable refinance programme, which loosens terms for underwater borrowers. JPMorgan booked net income of $460m from its mortgage business in the first quarter, compared with a loss of $1.1bn a year earlier. But Mr Dimon cautioned that there was a long way to go until his bank would be free of the mortgage crisis. JPMorgan took an additional $2.5bn charge from mortgage-related litigation. Like other banks, it faces lawsuits from mortgage bond investors and a probe by the Securities and Exchange Commission. The mortgage businesses" health was not enough to send either bank's share price higher. Even though both banks beat analysts" earnings expectations, higher costs weighed on investor sentiment. Shares in JPMorgan were down 3.8 per cent by the close in New York while Wells Fargo's shares fell 3.2 per cent. JPMorgan reported net income of $5.4bn for the first quarter, down from last year's $5.6bn, with revenues of $26.7bn exceeding expectations. Wells Fargo reported a 13 per cent rise in net income to a record $4.3bn on revenue that rose 6 per cent to $21.6bn. Both banks are among the strongest in the US, passing Federal Reserve stress tests last month and permitted to return capital to shareholders. But asked whether JPMorgan might consider a special dividend, Mr Dimon said that he would "consider" it only after new capital rules were known.