Big jump in mortgage business after earlier slump
Bank of America’s production soars in the middle of 2004, just months after the bank warned that mortgage volume had been cut in half. A mix of still-low interest rates, stronger home-purchase activity and added scale from the FleetBoston Financial acquisition helped drive a sharp rebound in the mortgage and consumer real-estate book.
Second-quarter results filed with regulators show a much larger residential mortgage portfolio and solid growth in home-equity and other consumer loans, reflecting both fresh originations and the integration of Fleet’s portfolio. Residential mortgage outstandings alone were more than $30 billion higher at 30 June 2004 than at year-end 2003, underlining how aggressively the combined franchise was putting loans on the books.
Riding the tail-end of the boom
Industry-wide, 2004 was shaping up as a year of high but shifting mortgage activity. Overall originations were running below 2003’s refinance peak, but were still strong by historical standards, with a growing tilt toward purchase loans and adjustable-rate products.
Bank of America’s production surge fit that pattern. For big retail lenders with broad branch networks and an expanded footprint after mergers, there was still room to grow mortgage volume even as pure refinance shops felt the squeeze.
For MortgageDaily readers, the message in July 2004 was straightforward: after a late-2003 slump, Bank of America’s production soars, turning a refi hangover into a resurgent, purchase-driven pipeline.
