US mortage lenders report profit despite home woes

* Thrift industry had 4th consecutive quarter of profits

* Industry still faces challenges from delinquent loans

* Number of problem thrifts continues to rise

* Profits were down slightly from previous quarter

By Dave Clarke

WASHINGTON, Aug 25 (BestGrowthStock) – The U.S. thrift industry
reported $1.49 billion in profits for the second quarter, a
slip from the previous quarter, but up from a $94 million loss
a year ago.

It was the fourth consecutive profitable quarter for the
industry, which reported a profit of $1.72 billion in the
previous quarter.

The industry still faces challenges from delinquent loans,
the Office of Thrift Supervision said on Wednesday.

The industry has put away $2.3 billion to guard against more
loan losses as the housing market struggles, according to the
OTS, which mostly regulates mortgage lenders.

On Wednesday, the Commerce Department said new single-family
home sales fell in July by 12.4 percent to a 276,000 unit
annual rate, the lowest since it began keeping track of the
data in 1963. [ID:nN25121445]

“The thrift industry has clearly improved from the height of
the recession but has certainly not recovered in full,” OTS
Acting Director John Bowman said. “The performance of the
industry reflects the state of the overall economy and the
stresses from high unemployment, weakness in the housing market
and the spread of weakness to the commercial real estate
market.”

The number of problem institutions rose to 54 from 50 at the
close of the previous quarter. That number stood at 40 a year
ago.

The amount of troubled assets improved with OTS reporting
that the percentage of noncurrent loans and repossessed assets
fell to 3.21 percent of industry assets, from 3.28 percent in
the previous quarter.

Under the new Dodd-Frank Act, which overhauled the rules
governing Wall Street, the OTS is being shut down and most of
its authorities transferred to the Office of Comptroller of the
Currency. The Federal Reserve and the Federal Deposit Insurance
Corp also will take on some of its responsibilities. The law
gives the agencies a year to complete this transition.

The OTS came under fire in recent years for not providing
enough supervision during the subprime mortgage crisis that
rattled the economy.
(Reporting by Dave Clarke; Editing by Robert MacMillan)

US mortage lenders report profit despite home woes