It was a record high for quarterly home-loan production at U.S. Bancorp. In addition, the servicing portfolio increased and residential delinquency improved. But delinquency on home-equity loans deteriorated.
Residential loan originations shot up to $16.6 billion in the third quarter — an all-time high. Business increased from $10.6 billion three months earlier, according to earnings data release Wednesday. U.S. Bank funded $14.8 billion in the third-quarter 2009.
During the first nine months of 2010, mortgage production totaled $36.1 billion.
In addition, the consumer finance division originated $4 million in subprime mortgages, off from $5 million funded in the second quarter.
The Minneapolis-based institution serviced $165.9 billion in mortgages for investors as of the end of last month, climbing from $163.2 billion on June 30. The third-party servicing portfolio was also higher than $145.0 billion on Sept. 30, 2009.
Residential mortgages on U.S. Bank’s balance sheet finished the latest quarter at $28.6 billion, growing from $26.1 billion on June 30 and $24.9 billion on Sept. 30, 2009. First-lien home-equity loans accounted for $5.8 billion of the latest total, up from $5.5 billion in June.
Second-lien and HEL holdings closed out September at $19.2 billion, edging down from $19.3 billion.
Mortgages that were at least 30 days past due, including nonperforming loans, accounted for 5.55 percent the bank’s mortgage portfolio. Delinquency fell from 5.83 percent three months earlier and 6.25 percent a year earlier.
Home-equity delinquency jumped to 1.84 percent from 1.73 percent on June 30. A year prior, HEL lates were 1.91 percent.
The bank’s chief weighed in on the foreclosure affidavit crisis.
“We routinely review our procedures and we have confirmed that we have strong processes and controls in place to ensure that our affidavits are accurate and that no one is wrongfully foreclosed upon,” Richard K. Davis, chairman, president and chief executive officer of U.S. Bancorp, said in the report. “We are able to closely manage the foreclosure process internally, given the manageable size and quality of our portfolio.”
U.S. Bank had 31,400 loans in the foreclosure process on Sept. 30. The average days in foreclosure was 254.
The company owned $34.3 billion in commercial real estate loans as of the end of the third quarter, slightly more than $33.9 billion three months earlier and one year earlier. The Sept. 30 total reflected $7.9 billion in construction-and-development loans.
Commercial real estate delinquency of at least 30 days was 4.70 percent, better than the second quarter’s 5.82 percent and the third-quarter 2009’s 6.55 percent.
The report indicated that “mortgages repurchased and make-whole payments made” were $53 million in the third quarter. The prior period’s figure was $27 million, while it was less than half that in the third quarter of last year. “Mortgage representation and warranties reserve” finished the quarter at $147 million, up from the second quarter’s $101 million. The company realized $24 million in repurchase losses during the three months ended Sept. 30, inching up from $20 million in the prior period.
Net income from the mortgage banking unit was $184 million during the most recent quarter. Earnings from the unit were up 36 percent from the prior quarter and 30 percent better than a year ago.
For all of U.S. Bancorp, net income rose to $1.2 billion from the prior period’s $1.0 billion. The company earned $0.7 billion at the same time last year.
