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Flagstar Mortgage Originations Up, Servicing Slips

Quarterly home lending grew at Flagstar Bancorp Inc., and indications are that further improvement is ahead. The mortgage servicing portfolio decreased.

During the period that began on Jan. 1 and ended on March 31, residential loan originations totaled $6.352 billion.

Business was better than during the final-three months of last year, when $5.824 in mortgages were funded.

Those details, along with other operational and financial results, were published in the Troy, Michigan-based company’s first-quarter 2016 earnings report.

Activity slowed, however, from the first-three
months of 2015
, when volume came in at $7.254 billion.

First-quarter 2016 originations included $3.8 billion in conventional loans, $1.5 billion in government business and $1.0 billion in jumbo production.

Refinance share climbed to 59 percent from half in the final quarter of 2015.

Fallout-adjusted locks totaled $6.9 billion, climbing 37 percent from the final quarter of 2015 and pointing to an increase in second-quarter production.

“We feel good about where we stand as it relates to TRID, and we saw the first signs of traction from initiatives aimed at growing our retail production channels,” Flagstar Bancorp President and Chief Executive Officer
Alessandro P. DiNello said in the report.

He added that the lender is actively seeking opportunities to
strengthen its mortgage origination capabilities across all channels.

The report indicated that growth will be accelerated in distributed and direct-to-consumer retail origination channels, and third-party originations will continue to be expanded with high quality mortgage brokers and correspondents.

The bank said it has around 1,200 TPO relationships.

Flagstar serviced 147,846 mortgages totaling $31.906 billion as of the end of last month. The servicing portfolio slipped from 149,345 loans for $32.233 billion three months earlier and 153,628 loans for $31.979 billion a year earlier.

The most-recent number included 118,768 mortgages totaling $26.613 billion serviced for third parties and 29,078 owned loans for $5.293 billion.

Another192,423 loans for $37.714 billion were sub-serviced for others as of March 31, 2016.

DiNello said that Flagstar is looking for opportunities to grow its sub-servicing business.

Residential assets on the balance sheet were reduced to $2.905 billion from $3.619 billion as of Dec. 31, 2015. Residential holdings expanded, though, from $2.475 billion as of March 31, 2015.

The March 31, 2016, total reflected $2.410 billion in residential first mortgages, $0.129 billion in second mortgages and $0.366 billion in home-equity lines of credit.

The financial institution owned $0.851 billion in commercial real estate loans, more than the $0.814 billion in CRE holdings as of year-end 2015 and $0.635 billion in the portfolio as of the end of the first-quarter 2015.

Warehouse lending assets were reduced to $1.282 trillion from $1.336 trillion but
increased from $1.083 trillion at the same point last year.

Flagstar’s repurchase pipeline was cut to $16 million as of last month from $20 million in the fourth-quarter 2015.

Earnings before income taxes jumped to $60 million from $45 million and was also up from $50 million in the first-quarter 2015.

DiNello noted that Flagstar expects to soon refinance its capital purchase program proceeds from the Troubled Asset Relief Program, or TARP.

As of the end of last month, Flagstar had 2,771 full-time employees. Staffing grew from 2,713 people as of the end of last year and 2,680 employees as of the same date last year.

Retail mortgage branch count totaled 26.

Flagstar operated 99 bank branches, the same as at year-end 2015.

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