Rising rates pushed down second quarter production at Flagstar Bancorp, and if the current pipeline is any indication -- the next quarter may be worse.
The Troy, Mich.-based thrift announced second quarter residential mortgage loan production of $9.0 billion -- off 5.2% from the prior quarter. This level of production is off nearly half from the $17.5 billion recorded in the second quarter of 2003.
"The decreased loan production achieved in the second quarter was in line with expectations during this part of the interest rate cycle," company chief executive officer Mark Hammond said in the announcement.
Flagstar reported that as of June 30 it had rate lock commitments -- a general indication of the level of mortgage production that can be expected in the near term -- of $2.6 billion compared to the $5.6 billion reported at the end of the first quarter.