FDIC Reports Strong Originations, Lowest Buybacks in 4 Years


Single-family retail originations by FDIC-insured institutions totaled $196.6 billion loans in the second quarter, up 2% from the prior quarter, and up 5% from the second quarter of 2012, according to a new Federal Deposit Insurance Corp. report.

The second quarter report shows that the 1,115 reporting banks recorded $8.1 billion in income from the sale, securitization and servicing of their 1-4 family loans, up from $7.9 billion in the first quarter.

The banks have enjoyed a great run over the past four quarters as retail originations averaged nearly $200 billion per quarter. But the impact of rising mortgage rates and the drop-off in refinancings will likely show up in the third and fourth quarter data. FDIC officials expect purchase mortgage originations will remain strong going forward.

FDIC requires insured depositories that originate more than $10 million in residential loans a quarter to report mortgage origination data, as well as all institutions with $1 billion or more in assets.

These reporting banks and thrifts sold $481.5 billion in 1-4s during the second quarter including loans they aggregate through their wholesale and correspondent channels. Loan sales in 1Q13 totaled $482.5 billion.

Meanwhile, loan repurchases and indemnifications fell to a four-year low. The FDIC reported that loan buybacks fell to $2.5 billion in 2Q13 after spiking to $6.1 billion in the prior quartermainly due to a huge repurchase settlement between Bank of America and Fannie Mae.

The $2.5 billion in repurchases is the lowest reported by FDIC since the second quarter of 2009. But historically, buybacks are still at a high level.

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