Bank SF Originations Plummet

Single-family mortgage loan originations by commercial banks and savings banks plummeted 50% in the third quarter, while thrift originations fell by only 5%.The Federal Deposit Insurance Corp. reported that 699 banks and savings banks originated 170.4 billion in one- to four-family loans in the third quarter, down from $345.9 billion in the second quarter. The Office of Thrift Supervision recently reported that thrifts originated $165.1 billion in one- to four-family mortgages in the third quarter, down 5% from the level recorded in the second quarter. Meanwhile, banks and thrifts maintained a high level of loan sales in to the secondary market. However, these FDIC-insured institutions reported a net loss of $139 million on loan sales in the third quarter -- the first quarterly loss since the FDIC started collecting the data seven years ago -- after reporting a $2 billion gain in the second quarter. FDIC-insured institutions increased their loan loss provisions in the third quarter as chargeoffs on residential mortgages rose to $676 million from $442 million in the second quarter. The chargeoff rate for 1-4s was 1.65% in the third quarter. Bank and thrift earnings for the third quarter totaled $28.7 billion, down 22% from those of the second quarter.