Thrift 3Q 07 Earnings Fall Sharply on Market Disruptions

Thrift institutions originated 30% of all 1-4 family mortgages in the third quarter but their earnings tumbled to $704 million, down from $3.83 billion in second quarter, according to the Office of Thrift Supervision.OTS officials blamed the 82% drop in earnings mainly on secondary market conditions that forced 10 thrifts recognize on losses on their mortgage pipelines and reduced gains on sales. Portfolio lenders did not fairly well in the third quarter. Federally chartered thrifts also increased the loan provisions to 0.92% from 0.38% in the second quarter as charge-offs rose 8 basis points to 0 .43% Charge-offs on single-family loans jumped to $569.5 millions from $312.6 million the second quarter. OTS officials expect charge-offs to increase in coming quarters. Meanwhile, thrifts originated $165.1 billion in 1-4 family mortgages, down 5% from the second quarter, but up 10% from a year ago. Refinancings accounted for 44% of loan production.