Bank of America marked down the asset value of its residential servicing portfolio by a stunning 36% in the third quarter, but managed to post mortgage banking income of $1.8 billion during the period.
Although the earnings attributed to its residential unit was good news, the division that mortgage banking is housed in – consumer real estate services – lost $1.1 billion during the quarter. (The division had $3.8 billion of “non-interest” expenses in 3Q.)
Year to date, B of A has lost $10.5 billion on residential finance – thanks to delinquencies, foreclosures and related expenses.
Moreover, the megabank originated just $33 billion of home mortgages during 3Q, a 20% decline from 2Q that comes at a time of increased loan production at its top competitors.
As reported, B of A is in the process of closing its profitable correspondent lending business, and also may shutter or scale back its warehouse finance group.
It recently shuttered retail production in six states but says it is committed to that channel.
At the end of September, B of A serviced $1.917 trillion of home mortgages, compared to $2.079 trillion a year ago.
As the National Mortgage News website went to press this morning the company was holding a conference call on its 3Q results with investors and analysts.
The entire company earned $6.2 billion in 3Q compared to a $7.3 billion loss a year ago.
