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38 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Stress Test Disclosure SEE HOW JPMORGAN CHASE PERFORMED IN ITS 2017 MID-CYCLE STRESS TEST DISCLOSURE. NEW YORK // JPMorgan Chase and Co. released its 2017 Mid- Cycle Stress Test Disclosure in accordance with regulation issued by the Board of Governors of the Federal Reserve. JPMorgan Chase, also recognized as "firm," is subject to such tests under requirements from the Dodd-Frank Act stress test (DFAST). The results reflect forecasted financial measures for the nine-quarter projection period (Q 3 2017 through Q 3 2019) under a Severe Adverse scenario, which is developed by the firm's economists. This Severely Adverse Scenario covers outcomes more adverse than expected in several key economic variables, including U.S. real GDP, U.S. inflation rate and U.S. unemployment rate, real estate prices, equity markets, short-term and long-term rates, credit spreads, and international component reces - sions in the Euro area, UK, Japan, and developing Asia. It's worth noting the firm recognizes a 5.2 percent decline in real U.S. GDP as a severely adverse scenario, as well as the annualized rate of change in the Consumer Price Index dropping from -0.1 percent in Q2 2017 to -2.7 percent in Q4 2017. The unemployment rate increasing by 5.0 percent in Q2 2017 to 9.3 percent in Q2 2019 and house prices declining 22 percent through Q2 2019 relative to their level in Q2 of 2017 are also both consid - ered severely adverse, according to economists from the firm. Capital and Risk-Weighted Assets (RWA) The common equity tier 1 capital ratio had an actual Q2 2017 amount of 12.6 percent. The 2017 Mid-Cycle /Regulatory Minimums from 2017 to Q 3 2019 remained at 4.5 percent, with a stressed capital ratio in Q 3 2019 at 8.8 percent and a minimum of 7.9 percent. Total risk-based capital ratio had an actual Q2 2017 amount of 16.4 percent with Mid-Cycle/Regulatory Minimums remaining at 8.0 percent from 2017 to Q 3 2019. The stressed capital ratios of Q 3 2019 measured at 12.9 percent and the minimum measured at 11.4 percent. The actual Q2 2017 RWA measured at $1.48 billion and the projected Q 3 2019 RWA was $1.5 billion. Profit and Loss Projections Pre-provision net revenue measured $54.2 billion with 2.2 percent of average assets. Provision for loan and lease losses mea - sured $58.1 billion and trading and counterparty losses measured $28.3 billion. This makes the net income before taxes $35.4 billion, which is 1.4 percent of average assets. Loan Loss Projections First lien domestic mortgages projected a loss of $44.4 billion with a portfolio loss rate of 5.0 percent, while junior liens and do - mestic home equity lines of credit (HELOCs) measured $3.6 billion, with a portfolio loss rate of 1.5 percent. According to the report, loan losses and loss rates are cal - culated to be consistent with the Federal Reserve's methodology. This includes impairments in the purchased credit-impaired (PCI) portfolios as part of loan losses and not included as part of loan loss reserves. Redfin Mortgage Expanding to Illinois THE COMPANY'S RECENT EXPANSION WILL CONTINUE INTO 2018, REACHING VIRGINIA AND OTHER STATES. Redfin Mortgage recently announced it will be offering loans to homebuyers in Illinois. Originally launched in January this year, Redfin Mortgage initially began in Texas and continues to expand; it plans to serve clients in Virginia by the end of the year as well as others in 2018. Redfin primarily serves homebuyers who choose Redfin real estate agents. Redfin currently offers 30- year and 15-year fixed rate and adjustable mortgages, as well as underwritten preapprovals. To guarantee a borrower an ap - proved loan, Redfin reviews and verifies all borrower information in advance. The borrower's credit and employment status must not significantly change after the pre-approval and the home shall not be appraised lower than the proposed sale price. The bor - rower must also provide proof of acceptable title commitment and homeowner's insurance. "In the current competitive real estate market, a fully underwritten pre-approval gives LOCAL EDITION ORIGINATION

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