Servicing Bolsters BoA's First Quarter
Benefiting from its acquisition of FleetBoston Financial Corp., Bank of America reported record quarterly earnings of $4.7 billion in the first quarter of this year, despite a sharp decline in mortgage lending volume.
Home loan originations declined by 26% compared to the first quarter of last year, but servicing gains helped offset lower loan origination revenue.
But the bank said that mortgage banking profits increased compared to a year earlier, and rising mortgage servicing rights appear to be one of the reasons.
Bank of America said that higher trading profits and mortgage banking income helped offset seasonal weakness in other sources of fee income.
In the first quarter of this year, Bank of America's mortgage banking income totaled $221 million, up from $209 million in the first quarter of 2004.
And the company said the value of its mortgage servicing rights has increased to $2.7 billion as of March 31, up from $2.5 billion at the end of 2004 and up from $2.2 billion at the end of the first quarter last year.
Bank of America serviced $275.5 billion of home loans at the end of the first quarter, up from $247.6 billion a year earlier. The bank originated $11.9 billion of home loans through its retail channel and $5.6 billion through wholesale channels in the first quarter.
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