Fed steers largest home lenders toward recovery

New York /
Jan.January 22, 2013 09:30 AM

The Federal Reserve’s housing policies have helped steer the four largest home loan lenders back to recovery, Bloomberg News reported.

Wells Fargo, JPMorgan Chase, Bank of America and U.S. Bancorp reported $24.4 billion in revenues from home lending in 2012 and expenses of just over $21.7 billion for settlements and loan repurchases, according to Bloomberg News data. Total loan originations for the year were $1.75 trillion, the highest levels since 2009, according to the Mortgage Bankers Association.

The increased activity was spurred by the Fed’s policy of pressing interest rates down, which led to lower borrowing costs and a spur of refinancing activity. Banks were able to cash in on the activity by lending at much higher rates than the bonds they received from the Fed and post higher profits, which economists say somewhat thwarts the Fed’s quantitative easing efforts to stimulate the housing market.

But experts say that as long as the Fed pushes interest rates down, the trend will continue. “The large banks are making a lot of money off of the Fed, and have been basically since it started buying mortgage backed securities,” Walt Schmidt, a mortgage strategist at FTN Financial, told the Journal. “As long as the Fed continues to buy them in current volumes, there’s no way around it.” [Bloomberg News]Hiten Samtani


Related Articles

arrow_forward_ios
Dov Hertz lands $442M loan for Sunset Park warehouse project
Dov Hertz lands $442M loan for Sunset Park warehouse project
Dov Hertz lands $442M loan for Sunset Park warehouse project
Top October loans: Cash cows, big buys, foreclosure avoidance
Top October loans: Cash cows, big buys, foreclosure avoidance
Top October loans: Cash cows, big buys, foreclosure avoidance
Bet against retail costs investor big-time
Bet against retail costs investor big-time
Bet against retail costs investor big-time
(iStock)
Refinancing has saved homeowners billions, but window is closing
Refinancing has saved homeowners billions, but window is closing
Wells Fargo CEO Charlie Scharf (Getty, iStock)
Wells Fargo hit with $250M fine, new restrictions over mortgage lending practices
Wells Fargo hit with $250M fine, new restrictions over mortgage lending practices
Clockwsie from top left: Aby Rosen with 980 Madison Avenue, 258-278 Eighth Avenue, 1 West Street and 511 Lexington Avenue (RFR, JJ Operating, Google Maps)
These were the largest Manhattan real estate loans in July
These were the largest Manhattan real estate loans in July
Wells Fargo, BlackRock join other firms in delaying office returns
Wells Fargo, BlackRock, Amazon join others in delaying office returns
Wells Fargo, BlackRock, Amazon join others in delaying office returns
1301 Sixth Avenue and Paramount Group's Albert Behler (Google Maps, Getty)
Wells, Morgan Stanley to provide Paramount’s $860M refi at 1301 Sixth Avenue
Wells, Morgan Stanley to provide Paramount’s $860M refi at 1301 Sixth Avenue
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...