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Big-four mortgage originations climb 37%

Mortgage originations at the big-four banks increased 37% in the second quarter from last year because of the expanded Home Affordable Refinance Program.

Wells Fargo (WFC), JPMorgan Chase (JPM), Bank of America wrote $205.8 billion in new mortgages in the three months ending June 30, according their combined financial filings.

Originations also increased 7% from the first quarter.

Wells continued to dominate. The San Francisco bank wrote $131.9 billion in new loans during the quarter, more than double originations from the same period last year. Wells said 16% of those new loans came through the Home Affordable Refinancing Program.

The Federal Housing Finance Agency expanded HARP last year to eliminate upfront costs, negative equity caps and some repurchase risk on the original loan – pushing more business to the largest banks.

Wells said 69% of its record $208 billion in mortgage applications were from borrowers looking to refi under HARP.

Legislation lingers in a grid-locked Congress to expand competition in the program by eliminating repurchase risk on the new loan as well. But analysts predict the HARP boom could begin to fade into autumn, well before any new legislation is expected to pass.

Chase wrote $43.9 billion in new mortgages during the quarter, up 29% from last year and 14.3% from the previous quarter. Originations at its retail branches set a bank record at $26.1 billion.

Bank of America continues to feel the drop off from exiting its correspondent lending channel last year. Originations fell 55% from one year ago to roughly $18 billion, the only yearly decline of the big-four lenders.

The bank ceased selling some mortgages to Fannie Mae as well, though executives said in an investor conference call that it regained some lost retail market share.

Citi originations totaled $12.9 billion, up 17% from last year but still down 10% from the previous quarter.


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