One of Michigan's largest banks reported that August mortgage fundings were off by about a quarter, while its gauge of future business was off by nearly half.
August production fell to $5.5 billion for Flagstar Bancorp, according to an announcement Tuesday. This level of activity is 25% less than July's record, but 53% better than a year ago.
Year-to-date, the company reported $45.3 billion in production.
The Troy, Michigan company reported that rate lock commitments, which it said are "a general indication of the level of mortgage production that can be expected in the near term," fell from $7.0 billion in July to $3.7 billion in August.
Flagstar, which claims to be the most profitable publicly traded banking institution in the country based on return on equity, said it completed a bulk sale of $4.6 billion of mortgage servicing rights. According to the announcement, Flagstar was left with a $28.0 billion mortgage servicing for others portfolio after the sale finalized.
"The sale of bulk servicing in August was made on a strategic basis, said CEO Mark T. Hammond in the announcement. "Management's assessment of our internal valuation, our capital position, our current operating levels, and the secondary market price were all taken into account."
He noted that the company has historically sold the majority of its servicing originations.