More Americans are taking out mortgages, paying them on time, and taking advantage of low interest
rates to refinance.

At JP Morgan Chase, the biggest U.S. Bank, income from new home loans set a record for the first quarter.
The bank issued 6 percent more mortgages than a year ago and got 33% more applications.

Wells Fargo, which issues the most home loans, booked the most mortgage fees since 2009. It issued 54% more
mortgages than a year ago and took 84% more applications.

Home prices are still falling, although more slowly than in previous years, and more than half a million American homes were going through foreclosure in March, according to
RealtyTrac.

Still, stronger mortgage business helped Chase and Wells Fargo beat Wall Street expectations for first quarter earnings. Chase reported that the bank had originated 200,000 mortgages
in the quarter.

Two key factors were:

1. The average interest rate on a 30 year fixed mortgage dropped
to 3.87 %, the lowest since the 1950s.

2. Job growth in January and February was some of the strongest
since the great recession began.

At Wells Fargo, 15% of mortgage applications came from the Government's Home Affordable Refinance program, which helps Americans who owe more than their property is worth get more
affordable loans.

Foreclosures are still holding the housing market back. A $25 billion settlement has paved the way for banks to take action on unpaid mortgages. The banks agreed to overhaul their mortgage practices. Because of that commitment and more disciplined internal rules, banks don't make as much money on foreclosures.

At a time when low interest has already reduced bank income, they must assign a banker to each homeowner undergoing a loan modification and ensure that each has the proper documentation.

Chase has set aside $2.5 billion to fight legal battles and Wells Fargo has added $314 million to it's legal reserves.

Chase turned a $ 5.4 billion profit for the quarter and Wells Fargo earned $4 billion, up from $3.6 billion a year ago.