JP Morgan Chase 2012 Annual Report Download - page 133

JPMorgan Chase & Co./2012 Annual Report 143
Geographic composition of residential real estate loans
At both December 31, 2012 and 2011, California had the greatest concentration of residential real estate loans with 24% of
the total retained residential real estate loan portfolio, excluding mortgage loans insured by U.S. government agencies and PCI
loans. Of the total retained residential real estate loan portfolio, excluding mortgage loans insured by U.S. government
agencies and PCI loans, $74.1 billion, or 54%, were concentrated in California, New York, Arizona, Florida and Michigan at
December 31, 2012, compared with $79.5 billion, or 54%, at December 31, 2011. The unpaid principal balance of PCI loans
concentrated in these five states represented 72% of total PCI loans at both December 31, 2012 and 2011.
Current estimated LTVs of residential real estate
loans
The current estimated average LTV ratio for residential real
estate loans retained, excluding mortgage loans insured by
U.S. government agencies and PCI loans, was 81% at
December 31, 2012, compared with 83% at December 31,
2011. Excluding mortgage loans insured by U.S.
government agencies and PCI loans, 20% of the retained
portfolio had a current estimated LTV ratio greater than
100%, and 8% of the retained portfolio had a current
estimated LTV ratio greater than 125% at December 31,
2012, compared with 24% and 10%, respectively, at
December 31, 2011. The decline in home prices since 2007
has had a significant impact on the collateral values
underlying the Firm’s residential real estate loan portfolio.
In general, the delinquency rate for loans with high LTV
ratios is greater than the delinquency rate for loans in
which the borrower has equity in the collateral. While a
large portion of the loans with current estimated LTV ratios
greater than 100% continue to pay and are current, the
continued willingness and ability of these borrowers to pay
remains a risk.