Mortgage Daily

Published On: June 1, 2007
Bank Activity Worse

FDIC reports lower outstandings, more lates

June 1, 2007


photo of Coco Salazar
Mortgages outstanding at federally-insured commercial banks and savings institutions edged down for the first time in over three years, and delinquency rose to the highest level in almost two decades. More than 70 institutions were merged in the latest quarter.

Outstanding residential real estate loans were $2.73 trillion in the first quarter, slightly off $2.74 trillion in the previous quarter but higher than $2.63 trillion in the comparable period a year ago, according to the Federal Deposit Insurance Corp.

The latest outstanding volume from FDIC-insured institutions consisted of “other” one- to four-family residential loans of nearly $2.17 trillion — off 0.3 percent and the first decline in 13 quarters — and home equity loans of close to $0.56 trillion, which edged down 0.5 percent from the fourth quarter, according to the report.

Commercial banks reportedly held 1.14 percent of the outstanding one- to four-family loan amount and 0.39 percent of HELs, and mortgage lenders had 0.91 percent and 0.62 percent, respectively.

Noncurrent residential mortgage loans increased by $1.7 billion during the three months ending in March, FDIC said in the announcement. The percentage of noncurrent one- to four-family residential mortgages rose from 1.05 percent to 1.13 percent in that time — the highest noncurrent rate for residential mortgage loans in the 17 years the data has been reported. However, according to the report, the percentage of such mortgages in the category of loans past due 30 to 89 days, declined 9 basis points to 1.21 percent.

The FDIC’s results were derived from 8,650 insured commercial banks and savings institutions reporting financial results, a net decline of 31 institutions from the end of 2006 due to 41 added reporters and 72 institutions being absorbed by mergers. One commercial bank, with $15.3 million in assets, failed during the quarter — representing the first FDIC-insured institution failure since mid-2004. Meanwhile, the number of institutions on the FDIC’s “Problem List” increased from 50 to 53 and the “problem” institutions assets rose from $8.3 billion to $21.4 billion during the quarter.

The Office of Thrift Supervision, which had six problem thrifts out of 838 it regulates, recently reported one- to four-family mortgages of $149.6 billion at the end of March jumped 20 percent from the fourth quarter. The rate of thrifts’ noncurrent one- to four-family loans rose to 1.14%.

OTS-regulated institutions added $1.2 billion to loan loss provisions during the quarter ending in March. Meanwhile, those insured by the FDIC set aside $9.2 billion, also slightly below that in the fourth quarter but the largest year-over-year increase — $3.2-billion — in five years.

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