More Banks Selling Residential Mortgages

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More community banks are selling their residential mortgages to the secondary market. A survey by America's Community Bankers found that 72% of banks responding to the survey are selling their mortgages, up from 55% in 2001 and 49% in 2000. In terms of dollar volume, the survey found that community banks selling into the secondary market sold 45% of their originations in 2002, compared to 41% in 2001 and 17% in 2000. (ACB said its survey excluded two very large banks whose data would have distorted the results. If included, the "average" community bank sold 39% of originations.

Other findings:

* The use of automated underwriting at banks continues to grow: 52% of respondents used automated systems in 2002, up from 41% in 2001.

* 63% use an automated home mortgage loan origination system, up just 1% from one year earlier.

* 10% of community banks' customers were first-time homebuyers, and 64% required or recommended education and counseling for at least one mortgage or consumer lending product.

* 30% said they expect to sell more of their loan production to the secondary market in 2003, while 43% expect no change.

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