Bank acquisitions in the mortgage space have been few and far between the past few years. Still, officials at Western Alliance believe it makes perfect sense for the bank to acquire AmeriHome Mortgage.
Banks reported $22.5 billion in mortgage banking income in 2020, according to call reports. Long-time industry leader Wells Fargo had a rough ride. (Includes data chart.)
The company, which buys and sells homes directly, cautioned that it may not have sufficient cash flow from its businesses to pay down its substantial debt.
Most publicly held banks reported substantial declines in mortgage banking income in the fourth quarter. But earnings for the full year were stellar, up about 78% from 2019. (Includes data chart.)
If mortgage originations are operating in a typical three-year cycle, profits will likely fall this year, according to industry analysts. The wild card: how lenders react to continued demand for refis.
Profit margins in the first quarter of 2021 will decline from the fourth quarter of this year, according to a survey of mortgage executives by Fannie Mae. Executives also believe the refi boom might have peaked.
Wells Fargo accounted for most of the improvement in servicing profits among a group of 14 public companies. Earnings from origination and secondary marketing remained sky-high. (Includes data chart.)
The newly public mortgage lender, Guild, reported $182.1 million in net income for the third quarter while the soon-to-be listed Finance of America posted net earnings of $241.6 million.
The top three banks reported a combined $2.3 billion in mortgage banking income for the third quarter of 2020, up $1.3 billion from the prior period. (Includes data chart.)
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