Bank of America BofA recently reported a significant increase in its first quarter mortgage loan volume compared to its big bank peers

The news provides further evidence of the financial institution's resilience and its ability to seize opportunities in the current market.

BofA's Q1 mortgage loan volume was up 11% year-over-year, compared to a 2% decrease for Wells Fargo and a 4% decrease for JPMorgan Chase. The growth was primarily generated from purchase loans, which rose 25% compared to 2020. Refinancing loans, while still strong with an 8% year-over-year increase, have begun to slow down as interest rates continue to climb.

In addition to increasing mortgage loan volume, BofA has seen a marked improvement in its delinquency numbers. The bank’s serious delinquency rate fell to 1.63% from 1.72% in Q4 2020, and is now below the rate of the overall US industry. BofA also boasted a quarterly gain of nearly $3 billion in net new single-family mortgage servicing rights for the quarter, more than any of its big bank peers.

The growth in mortgage loan activity is part of a larger trend in the banking industry, as well as among other lenders. Total mortgage origination volume grew by 10.7% in the first quarter of 2021 from 2020, and total mortgage production expenses (including third-party processing fees, commissions, and taxes and insurance) rose by 14%.

BofA's impressive performance can be partially attributed to its wide-reaching customer base and the benefits that come with servicing such a large number of customers. For example, BofA's major presence in the home equity loan market makes it easier for the bank to access a steady flow of refinance business. Furthermore, the bank's growing digital capabilities provide customers with a streamlined and convenient mortgage application process.

Additionally, BofA's strong capital position and its focus on cost control have enabled it to invest heavily in areas such as technology and digital transformation. This helps the bank remain competitive and be better positioned to benefit from market opportunities.

Overall, the impressive first quarter performance of BofA demonstrates the bank's ability to adjust its strategies to take advantage of current market trends and capitalize on opportunities. Its comprehensive customer base, digital transformation efforts, and focus on cost control have allowed BofA to outperform its big bank peers and position itself for even greater success in the future.

This article was contributed on Oct 20, 2023