Residential loan production was off by nearly a third at Ally Financial Inc. and has diminished by more than half over the past year. The results reflect the effect of the bankruptcy of Residential Capital LLC. Home-loan delinquency was lower.
Second-quarter mortgage loan production was $5.9 billion, according to earnings data released Wednesday. It was the lowest level of volume since Mortgage Daily began tracking business for the Detroit-based company in 2003.
Prime conforming loans accounted for $4.9 billion of second-quarter activity, while the prime non-conforming portion was $0.6 billion and government lending was $0.5 billion. Refinances accounted for 82 percent of second-quarter volume.
Activity fell from $8.6 billion in the first quarter. During the same three-month period in 2011, home-loan originations totaled $12.3 billion.
The decline reflects the May 14 Chapter 11 bankruptcy filing by mortgage lending subsidiary ResCap.
Delinquency of at least 30 days on the held-for-investment mortgage portfolio fell to 3.2 percent from 3.3 percent in the first quarter. Delinquency was 3.4 percent at the same point in 2011.
Outstanding repurchase claims climbed to $82 million as of the end of June from $55 million at the end of March. Second-quarter activity reflected $107 in new claims, $31 million in rescinded claims and $49 million in claims that were paid.
The report indicated that Ally announced its planned exit from warehouse lending.
Earnings from mortgage operations, including ResCap results prior to the May 14 deconsolidation, tumbled to $24 million from $191 million in the first quarter. But mortgage earnings were better than the $125 million loss reported for the second-quarter 2011.
Ally Inc. swung to a second-quarter core pre-tax loss of $753 million from a first-quarter profit of $474 million. The latest total reflected a $1.2 billion charge for the ResCap bankruptcy. The Detroit-based firm earned $465 million in the year-earlier period.
“The second quarter of 2012 marked a seminal moment for Ally,” said Ally Chief Executive Officer Michael A. Carpenter in the report. “Strategic actions were announced in May that aim to permanently address the legacy mortgage risks and put Ally on an accelerated path to repay the remaining U.S. Treasury investment.”
