The value of JPMorgan Chase's ($37.61 -0.25%) REO portfolio insured by US government agencies nearly tripled over the past year.

In addition, the default rate of option ARMs not backed by the US government rose sharply from a year ago, according to a supplemental earnings report.

While JPMorgan's primary Q210 financial report released Thursday does not delve into specifics regarding the bank's REO assets, a supplement report provides more detail.

REO insured by the US government totaled $1.4bn in Q210 compared to $508m in Q209. The latest results are nearly double the total from Q110, $707m.

In addition, JPMorgan said nonaccruing mortgages insured by US government agencies were up 140% from Q209, at $10.1bn in Q210 compared to $4.2bn one year ago. Nonaccruing mortgages are those that are late and no longer accruing interest. That volume is down, however, from $10.5bn in Q110, JPMorgan said.

In addition to the government-backed REO and nonaccruing mortgages, JPMorgan said its total nonperforming assets — loans, credit cards, real estate and other assets that don't generate revenue — was valued at $18.2bn at quarter's end, up from $17.5bn in Q209, but down from $19bn in Q110.

JPMorgan declined to disclose the gross number of REO properties in its inventory. But in JPMorgan's home loan portfolio — which includes home equity, prime and subprime mortgages and option adjustable-rate mortgages (ARMs) — the bank said it holds nearly $9.34bn in nonperforming mortgage assets, up 18% from Q209, but down 3% from Q110.

That pool of nonperforming mortgages in Q210 includes:

$4.65bn in prime mortgages, up 33% from Q209 and 2% from Q110

$3.12bn in subprime mortgages, up 12% from Q209, but down 6% from Q110

$409m in option ARMs, up 125% from Q209 and 18% from Q110

All nonperforming assets, including credit cards and home, auto and other loans accounted for 2.31% of the bank's overall consumer loan portfolio, up 4% from last year, but down 5% from Q110.

A spokesperson for JPMorgan could not immediately respond to requests seeking clarification as to why the level of government-backed assets had grown so much. But a change in accounting rules implemented this year sheds more light on the banking giant's exposure to real estate and mortgage-related risk.

At the beginning of 2010, new US accounting standards forced JPMorgan to adopt a new policy that required the bank to move assets from variable interest entities (VIEs) — a type of bank-administered investment tool that holds risk liability for assets like credit card and mortgage securities — onto the bank's balance sheets. In consolidating its mortgage, credit card and other consumer loan VIEs, JPMorgan added $87.7bn of assets and $92.2bn in liabilities to its balance sheet this year, including $3.5bn in mortgage securities and $3.7bn in liabilities.

Write to Austin Kilgore.

The author held no relevant investments.