More bad news in the world of lending. As Bank of America mortgage production plummeted 6% for the 3rd quarter of 2023. This includes both mortgage and home equity production compared to the previous quarter. BofA is saying more declines are yet to come. They claim that if regulators’ proposed capital rules are applied to banks.

The Federal Reserve, FDIC and the Office of the OCC released the proposed changes for the Basel III rule. It significantly increases capital requirements for banks.

Bank of America mortgage production totaled $5.6 billion during the third quarter of 2023. This is a 5.8% decline from $5.9 billion posted in the second quarter. It is also a 35.8% drop from the $8.7 billion originated in the third quarter of 2022. 

Bank of America’s sequential production decline follows that of Wells Fargo. Wells Fargo also posted lower mortgage volumes during the third quarter. Meanwhile, JPMorgan Chase showed a different path by slowly improved its production in the period.

Bank of America Mortgage Production By the Numbers

BofA also originated $2.42 billion in home equity loans in the third quarter.  The company says loan production was flat compared to last year. However, it is lower than the $2.54 billion volume in the previous quarter.

Bank of America had $229 billion in outstanding residential mortgages on its books through September 30th. This is up from $228.7 billion in Q2 2023. This is also up from $228.4 billion in the third quarter of 2022.

The home equity portfolio was $25.6 billion at the end of the third quarter, down from $25.9 billion from the previous quarter — and a decline from $27.3 billion a year prior.

Bank of America’s total mortgage-backed securities reached a $32.1 billion fair value as of Sept. 30, compared to $33 billion as of June 30, 2023.  

Overall, the bank posted a net income of $7.8 billion from July to September, increasing 5.3% quarter over quarter and 10% year over year.

Deposits at Bank of America were $1.88 trillion in the third quarter of 2023, flat compared to the previous quarter. The consumer banking division posted a net income of $2.86 billion, up $11 billion compared to the prior quarter, according to its filing with the Securities and Exchange Commission (SEC).