Residential lenders funded $503 billion worth of home mortgages in the third quarter, a 48% gain from the same period last year, but a letdown compared to the second quarter, according to figures compiled by National Mortgage News (NMN) and the Quarterly Data Report (QDR).

Mortgage lenders are continuing to benefit from record low interest rates and the $8,000 first-time homebuyer tax credit which was extended by Congress through the spring.

In the second quarter the industry wrote $583 billion in new home loans. Bank of America and Wells Fargo continued to dominate the production business with a combined market share of 39% in 3Q, NMN/QDR found.

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