A few years ago, Bank of America could typically report $1 billion per quarter in its mortgage banking income, but, as HousingWire staffer Kelsey Ramirez reports, in the first quarter of 2018, the income from this sector was so small that it was simply lumped into the “all other income” section from its consumer bank.
And while it may seem as though Bank of America is leaving the mortgage lending space, Ramirez notes that’s not the case.
Bank of America CEO Brian Moynihan explained to HousingWire that the difference lies in what the bank is doing with the loans after they are originated. Because the bank recently shifted to keep more of its mortgages on its balance sheet, there’s no sale, or gain on sale. This then has a negative effect on mortgage banking income, but does not mean the bank isn’t originating loans.
But while the bank may be keeping more mortgages on its balance sheet, its total originations are still decreasing. Its total loan production on first mortgages in the first quarter decreased to $9.4 billion. This is down from $12.7 billion in the fourth quarter, and from $11.4 billion in the first quarter of 2017.
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