BofA Remains Cautious on Mortgages
Bank of America, the nation’s second-largest bank, reports that mortgage originations soared 18 percent over year-ago levels, reaching $21 billion, but the company says it’s still being cautious with lending after past problems.
Despite the surge in mortgage originations, the bank’s mortgage unit continued to lose money. It’s still working through mortgages that turned sour from the housing crisis.
Mortgages can be a big revenue driver for banks. But financial institutions have been hit with “lawsuits, foreclosures, and regulatory headaches” that have dampened profits, the Associated Press reports. Bank of America has faced numerous lawsuits on its handlings of foreclosures.
But bank officials recently expressed growing optimism for the direction of the housing market.
“I think we’ve clearly begun to turn the corner” in the housing market, said Bruce Thompson, Bank of America’s chief financial officer, in a recent conference call to reporters. But, he added, he remains “a little bit cautious because there are headwinds out there. It’s obviously early in the cycle with home prices moving up. There are obviously certain questions that remain in the economy with respect to other matters.”
Mortgage originations in the most recent quarter also have soared at Wells Fargo and JPMorgan as well, with refinancings making up some of the biggest area of mortgage growth.