Banks' Retail Residential Volumes Slip Sequentially in Quarter

Commercial banks originated $146 billion of residential loans through their branches and other retail outlets in the fourth quarter, an 11% sequential decline, according to new figures compiled by the Federal Deposit Insurance Corp. However, compared to same period a year earlier, retail production rose 120%. The latest FDIC numbers show that 869 commercial banks and savings institutions are active in residential finance, up from 667 firms in the fourth quarter of 2008. (Currently, the profit margins on home lending remain strong thanks to a wide yield curve.) Banks are required to report origination data if they have assets of $1 billion or greater or originated $10 million or more of one-to-four family loans in the past two quarters. The FDIC figures also show banks had a strong year in terms of correspondent production: institutions purchased $248 billion of first-lien residential loans in the fourth quarter, compared to $148 billion in the same period a year earlier.