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JP Morgan and Wells Fargo report surge in profits

JP Morgan's profits increased by 34 percent in the third quarter.

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JPMorgan's headquarters in New York City. (Spencer Platt/Getty Images)

JP Morgan and Wells Fargo announced a surge in profits on Friday, the result of record-low mortgage rates and help from the Federal Reserve.

"The housing market has turned the corner," JP Morgan Chase CEO James Dimon said, the Wall Street Journal reported

Dimon has been working hard to draw attention away from last May's multibillion-dollar trading loss, which forced the bank to collect millions of dollars in compensation, shocked its investors, and draw attention from federal law enforcement agents, the New York Times reported

Wells Fargo's profits increased 23 percent, up to $4.7 billion from $3.8 billion last quarter; JP Morgan saw earnings increase by 34 percent to $5.71 billion, the Associated Press reported

More from GlobalPost: Wells Fargo faces US government lawsuit over alleged 'reckless' mortgage loans

The Federal Reserve is putting $40 billion a month towards mortgage rate to encourage Americans to buy homes, which may be benefiting the banks more than buyers, according to the Washington Post

“Banks are in the business of making money and are not going to cut their profit margins for the social good,” Paul Miller, a former examiner with the Federal Reserve Bank of Philadelphia, told the Post. 

Both banks, however, are currently facing several lawsuits: this week, Wells Fargo was served a federal lawsuit for "recklessly issuing mortgages backed by a federal insurance program," the Wall Street Journal reported, and last week, New York Attorney General Eric Schneiderman filed a civil lawsuit against JP Morgan over alleged fraud in selling mortgage-backed securities by the banks' Bear Stearns Co. 

More from GlobalPost: JP Morgan faces lawsuit over subprime mortgage securities

http://www.globalpost.com/dispatch/news/business/121013/jp-morgan-and-wells-fargo-report-surge-profits