Quarterly thrift fundings increased.
Thrifts originated $148.4 billion in one- to four-family mortgages during the second quarter, the Office of Thrift Supervision recently announced. Production reflected a 4 percent increase from the previous three months but a 12 percent downturn from the comparable period a year ago.
The volume reflects 25 percent of one- to four-family loan originations nationwide, OTS reported.
Adjustable-rate mortgages accounted for 37 percent of thrift originations, 7 percent less than the linked quarter, compared to ARM share for all lenders which rose.
Unlike banks, which typically sell their loans and pocket a small servicing fee, thrifts keep loans they originate on the balance sheet and pocket the spread between the interest earned on the mortgages and interest paid on deposits such as checking and savings accounts.
Loans 30-89 days past due edged up 4 basis points from the linked quarter to 0.87 percent of total one- to four-family loans, OTS reported.
Despite that increased foreclosures in local markets have not impacted thrift overall asset quality, the regulating agency noted it is closely watching delinquency and foreclosure rate upturns across markets nationwide and advised institutions to carefully monitor credit quality and potential borrower weakness. OTS also advised thrifts to monitor the effect rising rates are having on the performance of alternative loan products and to manage risks accordingly.
Industry aggregate earnings totaled $4.21 billion, unchanged from the prior quarter and up 4 percent from the year-ago period, according to the announcement. While earnings remained strong for the quarter, OTS warned they could be constrained in future periods due to the persistence of a flat-to-inverted yield curve, coupled with declining mortgage loan demand. |