Home Equity Lending News

Bank of America’s Home Equity Lending, Assets Slip

Second-mortgage originations were modestly lower at Bank of America Corp., as were home-equity investments on the financial institution’s balance sheet. But company-wide earnings were among the best ever.

From April 1 through June 30, home-equity originations, including closed-end and open-end loans, were $2.542 billion, the Charlotte, North Carolina-based company disclosed in its second quarter earnings report.

Business slipped from $2.596 billion in the prior quarter but edged up from $2.535 billion a year prior.

Average FICO scores on second-quarter 2023 production crept up to 790 from 789 in the previous period. The average booked combined loan-to-value ratio was unchanged at 58 percent.

Home-equity assets landed at $25.536 billion as of mid-year. BofA trimmed its holdings from $25.868 billion as of the end of the first quarter and reduced second-mortgage investments from $27.120 billion at the same point last year.

“Asset quality and the overall health of the U.S. consumer remained strong,” Bank of America Chief Financial Officer Alastair Borthwick noted in the report. “Total loss rates remained below pre-pandemic levels.”

Net income was $7.4 billion, down from $8.2 billion in the first quarter but better than $6.2 billion in the second-quarter 2022.

Despite the quarter-over-quarter decline, Bank of America Chair and CEO Brian Moynihan noted that the second quarter and first half were among the strongest “income periods in the company’s history.”

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