| WaMu’s Mortgage Banking Earnings Zero
$75.6 billion 2nd quarter production July 22, 2004 By MortgageDaily.com staff |
| While residential originations were up from the prior quarter, a decrease in mortgage banking income helped cut quarterly earnings in half for one of the country’s largest mortgage originators. However, subprime and home equity originations appear to be strengthening.
Second quarter residential loan volume was $75.6 billion, according to Washington Mutual, Inc.’s earnings supplement Wednesday, up from $59.5 billion the previous quarter. Last year at this time, fundings were $117.6 billion. Adjustable rate loans made up 54% of production, the Seattle-headquartered thrift reported, consisting mostly of Treasury-indexed loans. Included in the quarterly total volume was $7.3 billion in specialty mortgage finance production originated from subprime subsidiary Long Beach Mortgage, while home equity loans and lines of credit contributed another $11.6 billion, according to WaMu. In contrast to overall residential volume, these two segments have experienced mostly growth during the past 12 months. Retail production was $37.7 billion, while wholesale was $19.5 billion, WaMu reported. Purchased correspondent volume was $22.3 billion. Driven by a decline in mortgage banking income, which fell from $611 million a year ago to zero during the second quarter, net income for WaMu fell to $489 million from $995 million during the first quarter, according to the statement. “The root of our problem is the unacceptably high cost structure in our Mortgage Banking business,” chairman and CEO Kerry Killinger said in the announcement. “We know what we need to do, our efforts are well underway, and we will not be satisfied until we have fixed it.” |
