Feb. 28 (Bloomberg) -- JPMorgan Chase & Co., the third- biggest U.S. bank, had its earnings estimates cut by Goldman Sachs Group Inc. and Merrill Lynch & Co. on expectations of writedowns in the value of its home-equity loans.

Goldman analysts led by William Tanona trimmed their 2008 earnings-per-share estimate to $3.30 from $3.44 in a note to clients today. New York-based Goldman has a ``neutral'' recommendation on JPMorgan's stock.

Merrill Lynch analyst Guy Moszkowski cut his 2008 earnings- per-share estimate on JPMorgan to $3.83 from $4.07 and is also maintaining a ``neutral'' rating.

New York-based JPMorgan Chase & Co.'s Charles Scharf, chief executive officer of the bank's retail division, said yesterday that the bank may write half as many home-equity loans this year, due to changed underwriting practices and a sluggish housing market.

The lender had $94.8 billion of home equity loans on its books as of Dec. 31. As housing prices fall, loans issued in more recent years are defaulting sooner than older loans, making it hard to predict the extent of losses, he said.

``Given some of management's guidance, we expect first quarter of 2008 to be a sloppy quarter with writedowns on leveraged loans and mortgages,'' Goldman's Tanona said in a note to clients today.

To contact the reporter on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net

Last Updated: February 28, 2008 06:26 EST