Magazine article American Banker

Industry Group's Survey Finds Thrifts Gradually Diversifying Interests

Magazine article American Banker

Industry Group's Survey Finds Thrifts Gradually Diversifying Interests

Article excerpt

The thrift industry is gradually diversifying its business, with many institutions placing less emphasis on residential lending, a survey by America's Community Bankers shows.

"That transition, for many institutions, is well under way," according to a preliminary survey report released at the trade group's national mortgage markets conference in Tucson, Ariz., last week. "For many others, the transition is in the planning and i mplementation stages for the next five years."

But the report also emphasized that mortgage lending would remain an important part of community banking activity. Some large thrifts have converted in recent years to a mortgage banking mode of business, selling most of the loans they originate into the secondary market, and some further flow into mortgage banking is expected in the next few years.

Nationally, 21.7% of thrift institutions presently securitize loans for possible resale, and another 8.9% are planning to do so, the survey found. But that still leaves more than two-thirds of all thrifts with no plan to enter the secondary market.

Accompanying this limited interest in mortgage banking is an equally constricted interest in acquiring servicing rights. Only 7.6% of thrifts now acquire servicing rights without buying the loans, and only 3.4% more intend to buy servicing. And the number s are skewed upward by the relatively heavy involvement of the institutions with assets above $1 billion. Almost half already buy or plan to buy servicing rights. …

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