Past-due loans at thrifts rise 50% - S&Ls not big players in risky mortgages
Past-due loans at thrifts rise 50% - S&Ls not big players in risky mortgages
Copyright © 2007, Chicago Tribune and The Associated Press
August 22, 2007
WASHINGTON - Mortgage defaults are slamming the savings and loan industry, though federal regulators said Tuesday that thrifts should be able to weather the housing market downturn.
Troubled assets, loans that are 90 or more days past due, jumped to $14.2 billion in the second quarter, up 50 percent from the same quarter last year, the Office of Thrift Supervision said.
That's the highest level of troubled loans at the agency since 1993, with most of the problems in home mortgages, OTS officials said.
The numbers are particularly attention-getting considering that thrifts, which take in savings deposits and make mortgage loans, are not big players in the subprime mortgage sector of loans made to borrowers with riskier credit, where current credit problems began.
The level of delinquencies is still about one third as high as in 1989 through 1991, when the commercial real estate market faced a severe downturn.
Troubled assets rose to 0.95 percent of total assets in the second quarter for the 836 federally regulated thrifts, up from 0.62 percent in the second quarter of 2006 and 0.8 percent in the first quarter of this year.
About 4 percent of thrifts' total assets are in subprime loans, agency officials said. Still, officials said thrifts have adequate financial cushions and will emerge from the housing downturn.
"We have well-managed institutions and management understands that business cycles change," said Scott Polakoff, the OTS' chief operating officer.
Mortgage delinquencies and home foreclosures have skyrocketed this year, causing layoffs at banks and mortgage lenders, such as Countrywide Financial Corp. and Capital One Financial Corp.
Delinquencies rose to 1.26 percent of single-family mortgages in the second quarter from 0.8 percent in the year ago-quarter. Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, research firm RealtyTrac said Tuesday.
Housing market turmoil is contributing to a broader drop in the availability of credit, as banks pull back from riskier loans.
The thrifts reported net income of $3.84 billion in the second quarter, down nearly 9 percent from $4.21 billion in the year-earlier quarter.
Total single-family mortgage originations rose by nearly 17 percent, to $173.3 billion, driven by an increase in borrowers refinancing adjustable-rate loans to fixed-rate loans.
Refinancing made up 48 percent of thrifts' mortgage loans in the second quarter, up from 31 percent in the same quarter a year ago.
Copyright © 2007, Chicago Tribune and The Associated Press
August 22, 2007
WASHINGTON - Mortgage defaults are slamming the savings and loan industry, though federal regulators said Tuesday that thrifts should be able to weather the housing market downturn.
Troubled assets, loans that are 90 or more days past due, jumped to $14.2 billion in the second quarter, up 50 percent from the same quarter last year, the Office of Thrift Supervision said.
That's the highest level of troubled loans at the agency since 1993, with most of the problems in home mortgages, OTS officials said.
The numbers are particularly attention-getting considering that thrifts, which take in savings deposits and make mortgage loans, are not big players in the subprime mortgage sector of loans made to borrowers with riskier credit, where current credit problems began.
The level of delinquencies is still about one third as high as in 1989 through 1991, when the commercial real estate market faced a severe downturn.
Troubled assets rose to 0.95 percent of total assets in the second quarter for the 836 federally regulated thrifts, up from 0.62 percent in the second quarter of 2006 and 0.8 percent in the first quarter of this year.
About 4 percent of thrifts' total assets are in subprime loans, agency officials said. Still, officials said thrifts have adequate financial cushions and will emerge from the housing downturn.
"We have well-managed institutions and management understands that business cycles change," said Scott Polakoff, the OTS' chief operating officer.
Mortgage delinquencies and home foreclosures have skyrocketed this year, causing layoffs at banks and mortgage lenders, such as Countrywide Financial Corp. and Capital One Financial Corp.
Delinquencies rose to 1.26 percent of single-family mortgages in the second quarter from 0.8 percent in the year ago-quarter. Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, research firm RealtyTrac said Tuesday.
Housing market turmoil is contributing to a broader drop in the availability of credit, as banks pull back from riskier loans.
The thrifts reported net income of $3.84 billion in the second quarter, down nearly 9 percent from $4.21 billion in the year-earlier quarter.
Total single-family mortgage originations rose by nearly 17 percent, to $173.3 billion, driven by an increase in borrowers refinancing adjustable-rate loans to fixed-rate loans.
Refinancing made up 48 percent of thrifts' mortgage loans in the second quarter, up from 31 percent in the same quarter a year ago.
posted by Carlos T Mock at 10:34 AM
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