NEW YORK – For banks, mortgage-making kept profits humming before the financial crisis, then blackened reputations and stamped out earnings when the crisis hit.
Now, the business of mortgage lending is more of a mixed bag.
Bank of America, the country’s second-biggest bank, reported Wednesday that mortgage originations jumped over a year ago – up 18 percent to $21 billion. But the mortgage unit still lost money as the bank worked through problem mortgages issued before the crisis.
Bank of America is the last of the mortgage-heavy mega-banks to report third-quarter earnings.
Mortgage originations soared at Wells Fargo, rose respectably at JPMorgan and Bank of America, and fell at Citigroup.
Refinancing made up the bulk of the banks’ mortgage growth this quarter – at Bank of America, it accounted for 83 percent.
Overall, Bank of America earned $340 million in the third quarter, which worked out to a fraction of a penny per share. That was far less than a year ago but better than what Wall Street was expecting.
The results were skewed by one-time charges. The bank took a $1.6 billion charge for litigation expenses. Most of that was because it agreed last month to settle a shareholder lawsuit accusing it of misleading investors about its decision in 2008 to purchase Merrill Lynch. Bank of America denied the allegations but said it wanted to move on.