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FHA Drives Deteriorating Delinquency at BoA

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Excluding government-insured loans, the rate of home loan payments at Bank of America Corp. that were at least one month past due fell below 3 percent. Including government mortgages, the rate soared past 8 percent. Originations and consolidated mortgage earnings, meantime, fell.

First-quarter production was $71.5 billion at the Charlotte, N.C.-based company, earnings data released today indicated. Volume dropped from the prior quarter’s $89.4 billion and was also lower than $89.3 billion in the same period during the prior year.

Almost $69.1 billion of first-quarter fundings were originated out of the home loans operation, while the rest was originated through the global wealth & investment management operation.

First mortgage originations were more than 320,000 loans for $69.5 billion, falling from $86.6 billion in the prior quarter. Around 37 percent of first-mortgage production was for purchase transactions.

Home-equity activity fell to $2.0 billion from $2.8 billion.

The third-party mortgage servicing portfolio was$1.717 trillion on March 31, higher than $1.716 trillion three months earlier and $1.699 trillion one year earlier.

At the end of March, residential mortgage holdings were $245.0 billion, higher than $242.1 billion at the end of December. Home-equity holdings edged up to $149.9 billion from $149.1 billion. Discontinued real estate assets finished the quarter at $14.2 billion, lower than $14.9 billion three months earlier.

Residential delinquency of least 30 days leapt to 8.51 percent from 8.00 percent at the end of 2009. The delinquency rate was only 3.03 percent at the end of March 2009.

JPMorgan Chase & Co., the only other major institution to report first-quarter earnings, said its 30-day delinquency fell to 7.28 percent from 7.73 percent on Dec. 31 — though that rate excluded poorly performing loans inherited through its acquisition of Washington Mutual Bank.

BoA noted that if loans which are insured by the Federal Housing Administration are excluded from its numbers, its delinquency rate would have fallen to 2.67 percent from 3.11 percent at the end of December and 2.88 percent at the end of March 2009.

Commercial real estate assets concluded the first quarter at $66.6 billion, less than $69.4 billion on Dec. 31.

Consolidated mortgage banking income was $1.5 billion, lower than the fourth quarter’s $1.7 billion and less than half the $3.3 billion earned a year earlier.

Net income after taxes at the parent corporation was almost $3.2 billion, a vast improvement from the $0.2 billion fourth-quarter loss but lower than $4.2 billion a year ago.

The default management staff increased by nearly 7 percent from the fourth quarter to finish March at more than 16,000.

BoA finished last month with 283,914 full-time employees, slightly more than 283,717 at the end of last year but less than 286,625 on March 31, 2009.

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