Residential Production by Thrifts Plunge

Thrift institutions funded just $34.4 billion of single-family loans in the fourth quarter, about one-third of what they originated in the first quarter, according to new figures compiled by the Office of Thrift Supervision. The weak performance stems, in part, from the declining number of S&Ls. In the fourth quarter, the number of institutions fell to 765, a decline of 45 firms. The chief reason for the drop: company failures. The remaining thrifts have $942 billion of assets, including $273 billion in one- to four-family loans and $141 billion of mortgage-backed securities. Nearly 5% of the single-family loans are seriously delinquent, compared to 3.7% a year ago, but down from 5.7% in the third quarter. For all of 2009, S&Ls originated $224 billion of home mortgages — a 35% decline from the year before. (Of course, in 2008 Countrywide Financial Corp., then the nation's largest home funder, was still in business. CFC had a thrift charter.) Thrifts posted a $55 million profit for the fourth quarter and a $29 million profit for the whole year. In 2008, the thrift industry suffered through $15.8 billion of losses. "Although we are encouraged that the industry performance has moved in a positive direction, unemployment is still running high and home prices are still down in many parts of the country," said OTS acting director John Bowman.