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BoA Originations Dive

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If Bank of America Corp.’s originations are any indication, the latest quarter was a disaster for U.S. mortgage lenders.

Third-quarter production was $58.0 billion, including $6.4 billion in home-equity loan volume, earnings data released today indicated. The latest report was the first that included aggregate data for the Charlotte, N.C.-based bank and Countrywide Financial Corp., which was acquired on July 1.

Fundings fell from $92.9 billion in the second quarter, which included $33.9 billion for BoA and $59.0 billion for Countrywide.

A year earlier, total production was $142.6 billion, including BoA volume of $48.0 billion and Countrywide volume of $94.6 billion.

The total portfolio of mortgages serviced for investors was $1.654 trillion on Sept. 30.

Residential mortgages on the balance sheet ended the period at $257.0 billion, while HELs totaled $151.9 billion. Discontinued real estate loans, which includes subprime mortgages and HELs originated by Countrywide, was $22.1 billion at the end of the quarter.

Combined, loans serviced for others and residential loans on the balance sheet total $2.085 trillion.

Delinquency of at least 90 days on residential mortgages was 0.12 percent on Sept. 30, unchanged from June 30.

BoA said it modified more than 73,000 loans during the third quarter compared to 14,000 a year earlier.

Commercial real estate loans on the balance sheet at the end of June were $63.7 billion.

The third-quarter net charge-off ratio was 0.37 percent on residential loans and 2.53 percent on HELs. On commercial mortgages, there was a 1.65 percent net charge-off ratio.

Net income was $1.2 billion during the latest period, tumbling from $3.4 billion in the second quarter and $3.7 billion during the third-quarter 2007. Mortgage banking income increased $1.2 billion due to the addition of Countrywide, which contributed $0.3 billion to net earnings during its first quarter of inclusion.

BoA said it would reduce its common stock dividene to $0.32 from $0.64, a move it expects will add more than $1.4 billion each quarter. The bank also said it will raise $10 billion in common stock.

BoA employed 247,024 people on Sept. 30, down from a combined total of 256,566 on June 30.

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