The nation’s depositories will continue to enjoy robust residential gain-on-sale margins through the third quarter, increasing both revenues and earnings, according to a new report from Credit Suisse.
The investment banking firm projects that seller/servicers will book a GOS of 324 basis points in the third quarter versus 308 basis points in 2Q12.
It adds that third quarter “spreads are expected to be well in excess of the nine-quarter average of 205 basis points – which should support healthy production revenues this quarter.”
GOS refers to the profits a seller/servicer makes when it sells a residential loan into the secondary market. Industry-wide, mortgage banking profits have been strong the past several quarters.
The nation’s five largest residential funders are all commercial banks, according to figures compiled by ASR sister publication National Mortgage News and the Quarterly Data Report. However, a handful of nonbanks now rank among the top 15: PHH Mortgage, Provident Funding, Quicken, and Franklin American Mortgage