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Mortgage Lenders Meet 2Q Expectations: KBW

AUG 4, 2014 1:47pm ET
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Second-quarter earnings at the country's largest mortgage banks met analyst expectations, according to a recent report from Keefe, Bruyette & Woods.

Mortgage activity increased from the previous quarter, but remained well below last year's results, the report showed.

A rise in originations boosted second-quarter profits at the ten largest banks, including Wells Fargo, JPMorgan and Bank of America. Origination volumes climbed 22% from the previous quarter, to $108.4 billion. Originations were 60% lower, however, than the same time last year.

Gain-on-sale margins were generally flat, due to strong industrywide competition. The average margin was 202 basis points, or one basis point higher than the previous quarter.

The valuation of mortgage servicing rights remained low, as well, due to falling interest rates. The average mark for the second quarter was approximately 5% of the carrying value of the MSR.

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