Banks cashed in on mortgages last year, reporting record earnings on mortgages in 2012.
Banks’ mortgage profits are finally starting to surpass the cost of the faulty loans and foreclosures that have bogged down many lending arms the last few years. If you are looking for a home loan, view site to get a the best rates available.
Four major lenders — Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., and U.S. Bancorp — reported $24.4 billion in home mortgages in 2012. Meanwhile, expenses from loan repurchases and foreclosure settlements were about $21.7 billion, Bloomberg reports.
Home owners and buyers are rushing to take advantage of low borrowing costs as mortgage rates hover at all-time lows. Mortgage originations totaled $1.75 trillion last year, the highest since 2009, the Mortgage Bankers Association says.
“They’ve come out from the self-inflicted gunshot wound to the head and are now starting to recover due to a government- induced set of policies and programs,” says Clifford Rossi, a former risk manager and managing director at Citigroup Inc.
Wells Fargo has been the largest U.S. mortgage lending service company in the market, originating nearly 1 in 3 mortgages as of September. Wells Fargo reported a 24 percent increase in profits during the fourth quarter, and about $11.6 billion in revenue from mortgages for all of 2012.
This year is expected to be another strong year in mortgage lending. The top four banks, which control about half of the origination market, are expected to bring in about $27.3 billion from mortgages in 2013, according to a forecast by Chris Kotowski, an analyst with Oppenheimer & Co.
“Momentum continues to build in the housing market,” John Sim, a JPMorgan analyst, wrote recently. “Builders are reporting the best sales conditions they’ve seen in more than five years.”
The author of this article is: realtormag.realtor.org
See the original post at: http://realtormag.realtor.org/daily-news/2013/01/23/banks-boost-profits-home-lending
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