Banks See Higher Retail Originations, Lower Wholesale Volume

Mortgage & Real Estate









Single-family mortgage originations jumped 7.5% in the third quarter at banks compared to a quarter earlier, the Federal Deposit Insurance Corp. said Tuesday.

Institutions originated $89.8 billion in such loans through their retail networks, up from $83.5 billion in the second quarter but down 36% from a year earlier when the refinancing boom was winding down.

Wholesale originations, meanwhile, totaled $67 billion in the third quarter, down from $80.1 billion in the prior quarter.

Insured depositories that originate more than $10 million in residential loans a quarter are required to report mortgage origination data, as do all institutions with $1 billion or more in assets. According to the 966 reporting institutions, they earned $4.8 billion in mortgage banking income from the sale, securitization and servicing of mortgages in the third quarter, down from $5 billion a quarter earlier.

The FDIC report also shows that banks paid $2 billion to repurchase bad loans or indemnify guarantors and insurers for loan losses in the third quarter, compared to $838 million in the prior quarter. It marked the highest amount of repurchase and indemnifications since the second quarter of 2013. Banks and thrifts held nearly $3.85 billion in representation and warranty reserves as of Sept. 30, down from $8.1 billion a year ago.

FDIC-insured institutions also reported that they sold $178 billion in loans during the third quarter and held another $70.4 billion in single-family loans at the end of the quarter that are earmarked for sale.

Overall, 6,589 FDIC-insured banks and thrifts held $1.84 trillion in one-to-four family loans on their balance sheets as of Sept. 30, virtually unchanged from a year ago. These institutions also held $1.72 trillion in mortgage-backed securities, up 3% from a year ago.

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