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local edition SERVICING North Carolina // Bank of America (BofA) released its thirdquarter earnings report recently, showing healthy growth despite an expected weakening in its mortgage banking operations. According to the earnings release, BofA took in $2.5 billion in Q 3, a significant increase from the $340 million reported in the year-ago quarter. For the nine Profits rose more than $2 billion year-over-year, but the bank's real estate division took a big hit. Loss in Revenues Drags Down Citi's Q3 Earnings Citi was just one of many banks that felt a sting as higher interest rates drove down refinances. New York // Citigroup reported a third-quarter net income of $3.2 billion, slipping somewhat as higher interest rates took a bite out of mortgage revenues. According to Citi's quarterly earnings summary for Q 3, global consumer banking (GCB) revenues fell 7 percent year-over-year to $9.2 billion "as significantly lower refinancing activity and continued spread compression globally more than offset the ongoing volume growth in most international businesses." In North America alone, GCB revenues fell 12 percent to $4.7 billion, driven mainly by a decline in retail banking revenues, which in turn reflected lower mortgage origination revenues. The bank expects lower origination numbers to continue to weigh down retail banking revenues in the future. The bank also suffered from $635 million worth of incremental mortgage charge-offs required by the Office of the Comptroller The M Report | 49 se c on da r y m a r k e t "While many of the factors which influence our revenues are not within our full control, we certainly can control our costs and I am pleased with our expense discipline and improved efficiency year-to-date," Corbat said. "With the environment remaining challenging, we will continue to focus on all aspects of our business to improve client satisfaction BofA Earnings Strong Despite Loss in Mortgage Operations months ending September 30, total net income was $8 billion compared to $3.5 billion in 2012. The bank attributed its growth in part to improved credit quality and lower expenses, though those factors were partially offset by lower income from mortgage banking. BofA's Consumer Real Estate Services division reported a net loss of $1 billion, faring even worse than last year's loss of $857 million. Revenue was nearly half that of last year, falling to $1.6 billion. The provision for representations and warranties was also a little higher, rising about $16 million to $323 million. BofA says it funded $24.4 billion in residential home loans and home equity loans during Q 3, helping nearly 97,000 homeowners either refinance or purchase a home through its retail channels. Approximately 78 percent of funded first mortgages were refinances, while 22 percent were for home purchases. The provision for credit losses on the mortgage side decreased $571 million from Q2 2012 to a provision benefit of $308 million "due to continued improvement in portfolio trends including increased home prices and the impact of regulatory guidance in the prior-year period regarding the treatment of loans discharged from Chapter 7 bankruptcy." Meanwhile, loan performance improved, with the number of first mortgage loans that are 60 or more days delinquent falling 19 percent quarter-over-quarter and 57 percent year-over-year. "This quarter, we saw good loan growth, improved credit quality, and record deposit balances. Our customers and clients continue to do more business with us," said BofA CEO Brian Moynihan. "The economy and business climate will improve even more quickly as conditions normalize, and we are well positioned to benefit from that." a na ly t ic s and shareholder results consistent with our strategy." s e r v ic i ng of the Currency's guidance on the treatment of loans where the borrower has gone through Chapter 7 bankruptcy. Most of what was offset was a related release reserve of approximately $600 million. Despite the bank posting a somewhat disappointing performance, CEO Michael Corbat maintains Citi "performed relatively well in this challenging, uneven macro environment." Or ig i nat ion platform for the institutional market place," Deane said. "Our partnership presents a win/win as it marries Carrington's operational expertise with Gorelick's reputation as a leading investment advisor for the housing industry." Carrington Property Services' president, Kevin Cloyd, agreed. "We are looking forward to partnering with Gorelick as they expand their portfolio over the next several years. Our partnership will assist Gorelick with meeting both their property management and financial objectives, while at the same time ensuring their tenants receive the very best of service," he said.

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