ACB: Community Banks Selling More Loans

More community banks and thrifts sold residential mortgage loans into the secondary market last year, but the sales still represented only 45% of their loan production, according to an annual survey by America's Community Bankers.The ACB survey found that 72% of the respondents sold loans to secondary market agencies and private wholesalers in the first nine months of 2002, up from 55% in 2001. The 315 respondents sold $22.5 billion in residential mortgage loans, including $9.5 billion to Fannie Mae, $7.6 billion to private wholesalers/conduits, and $3.2 billion to Freddie Mac. However, they still retained $22.5 billion in originations on their books. The author of the survey, ACB senior financial economist Steven Davidson, pointed out that the smaller community banks tend to do more business with Freddie Mac, while the larger banks (with more than $1 billion in assets) tend to do more business with Fannie Mae. Only 9% of the banks and thrifts in the survey participate in the Federal Home Loan Banks' Mortgage Partnership Finance program and the Mortgage Purchase Program, and they sold $888,000 in loans to the FHLBanks. ACB can be found online at http://www.acbankers.org.