Bank Originations Up 20%

Single-family loan production by commercial banks jumped by 20% in the second quarter, compared to the previous quarter, but they sold an equivalent amount of loans into the secondary market, according to Federal Deposit Insurance Corp. data. The 657 commercial banks and saving banks that reported origination data to FDIC made $345.9 billion in 1-4 family loans in the second quarter, compared to $286.6 billion in the first quarter. But these depository institutions also sold $348.3 billion in first lien SF loans into the secondary market. FDIC also reported that 1.33% of $1.94 trillion in single-family loans held by banks and thrifts are 90 days or more past due, up from 0.92% in the second quarter of 2006. Charge-offs on first lien SF loans remain low at 0.14%. However, charge-offs on second liens, which could be associated with piggy-back loans, hit 0.79% in the second quarter, up from 0.45% in the same period a year ago.