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Flagstar Mortgage Sales Staff Grows Despite Business Decline

Originations tumble 29% from Q2 to Q3


Oct. 24, 2013

By Mortgage Daily staff


The number of loan originators and account executives increased at Flagstar Bancorp Inc. even though mortgage production tumbled. The company increased its focus on purchase financing.

The Troy, Mich.-based firm reported third-quarter mortgage originations of $7.737 billion.

Business was down from the second quarter, when total production amounted to $10.882 billion.

Loan fundings have plummeted by nearly half compared to the $14.514 billion in home loans closed in the same three-month period last year.

In the nine months ended Sept. 30, 2013, residential originations totaled $31.043 billion.

Purchase financing during the three months ended last month was $3.682 billion, rising from $3.147 billion in the second quarter despite the overall decline.

"Mortgage banking continues to be a key component of Flagstar's overall strategy, and we are adapting to a shift in the mortgage industry from a primarily refinance-driven market to a purchase market by further reducing our cost structure and focusing our efforts on appropriate growth opportunities," Flagstar President and Chief Executive Officer Sandro DiNello said in the report.

The report indicated that fallout-adjusted rate lock commitments fell a third from the second quarter to $6.6 billion.

Flagstar serviced $74.200 billion in mortgages for third parties. The servicing portfolio grew from $68.321 billion three months earlier and $82.415 billion 12 months earlier.

Residential first mortgages on the books fell to $2.479 billion from $2.628 billion. The total was also down from $3.086 billion one year prior.

Second-mortgage holdings were trimmed to $0.174 billion from $0.181 billion but have increased from $0.122 billion as of the same date in 2012.

Home-equity lines of credit owned by the bank were $0.308 billion, off from $0.322 billion -- though Flagstar has grown its HELOC holdings from $0.192 billion in the third-quarter 2012.

Warehouse lending assets retreated to $0.390 billion from $0.676 billion at the end of the second quarter. The total was $1.307 billion at the same point last year.

Commercial real estate assets were $0.421 billion, lower than $0.477 billion as of June 30. CRE assets were off by more than half from $1.005 billion 12 months previous.

Flagstar said it received 804 repurchase demands, four more than in the second quarter. The repurchase pipeline jumped to $155 million from $115 million.

Income before taxes at the parent company sank to $14 million from the prior period's $61 million and plummeted from $141 billion in the third-quarter 2012.

As of the end of September, there were 359 loan officers and account executives, more than 341 employed as of the end of June and the 336 employed at the same point last year.

In addition, 3,069 full-time employees were on Flagstar's payroll, dropping from 3,418 at the end of the second quarter. Headcount was 3,240 as of Sept. 30, 2012.

Flagstar operated 45 loan origination centers. The number grew from 40 at the end of the second quarter and 31 at the end of the third-quarter 2012.

Bank branch count was unchanged from June 30 at 111.

Flagstar profile

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