Mortgage revenue at the four largest U.S. lenders is surpassing the costs of faulty home loans and foreclosures from the housing boom as Federal Reserve and government policies help fuel the recovery.

Wells Fargo & Co. (WFC)JPMorgan Chase & Co. (JPM)Bank of America Corp. (BAC), and U.S. Bancorp (USB) reported $24.4 billion from home lending in 2012 and expenses of more than $21.7 billion for settlements and loan repurchases, according to data compiled by Bloomberg. Lower costs for firms such as Bank of America this year will act as a "tailwind," as mortgage revenue remains strong, Goldman Sachs Group Inc. (GS) analysts said.