The nation’s top three megabanks – Wells Fargo & Co., Bank of America, and JPMorgan Chase – saw their second lien production volumes swoon in the first quarter, according to new figures compiled by National Mortgage News and the Quarterly Data Report.
Wells funded $1.53 billion of seconds in 1Q, a 32% decline from the same quarter a year ago. But BofA and JPMorgan faired even worse with volume declines of 62%, and 64%, respectively.
Every single home equity lender among the top 10 experienced a double-digit decline in production with the exception of Doral Financial Corp., San Juan, P.R., which originated $97 million in seconds, compared to just $3 million in 1Q 2010.
Nonbank lenders have mostly exited the second lien space over the past four years, while those left in the sector have tightened underwriting standards.
Declining home values and a weak outlook for housing have hampered any recovery in the niche.