Bank of America Reports Mortgage Originations Are Down 11.5% In Second Quarter
Bank of America reports that customers haven’t slowed down their activities despite a fear of a recession.
In addition. Bank of America reported that deposits have grown to a record level above $1 trillion. The bank also says consumer spending is increasing for the second quarter of 2022.
However, BofA is not immune to surging interest rates. Gains in the consumer banking division declined during the second quarter. The cause? Mortgage origination volume was down dramatically.
Bank of America posted a $2.88 billion profit in its consumer banking division in the second quarter.
This down from a $2.97 billion profit in the first quarter.
Mortgage originations from the bank totaled $14.5 billion in he 2nd quarter. This is an 11.5% drop from $16.4 billion in the first quarter and 28.5% below the roughly $20 billion hit at the same point last year.
BofA’s decline follows its competitors. JP Morgan and Wells Fargo. They also had significant declines in originations during the second quarter.
On the bright side, BofA’s home equity originations increased from $2 billion to $2.5 billion. In the second quarter of 2021, it was only $1.2 billion in the second quarter.
Bank of America had $228 billion in outstanding residential mortgages on its books through June 30th. This up from $226 billion in the first quarter and $214 billion in the second quarter of 2021.
The home equity portfolio went from $30.5 billion to $27 billion in a year.
Bank of America’s total mortgage-backed securities reached $44.3 billion fair value as of Sept. 30th. This is compared to $62 billion as of March 31.
The bank reported a consumer net charge-off of $525 million in the second quarter, an increase of $185 million from the previous quarter, including $85 million from non-core mortgage sales.
This article originally appeared on MFI-Miami.
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