WASHINGTON — Retail single-family loan originations by banks and thrifts plunged 39% in the fourth quarter to the lowest level in five years, according to data released by the Federal Deposit Insurance Corp. on Wednesday.

The agency said institutions originated $86.5 billion in single-family loans in the fourth quarter, down from $141.4 billion a quarter earlier and off 57% from the same point in 2012.

Refinancings were strong during the first half of the year and retail originations hit $196.6 billion in the second quarter. But the market has rapidly declined over the rest of the year.

Meanwhile, banks and thrift paid out $1.2 billion to meet loan repurchase and indemnification demands in the fourth quarter, the lowest amount since 2008.

The FDIC's "Quarterly Banking Profile" said banks and thrifts earned $5.3 billion in non-interest income from the sale, securitization and servicing of 1-4 family loans, up from $4.8 billion in the third quarter.

The FDIC requires banks that originate more than $10 million in residential loans a quarter to report origination data, as well as all institutions with $1 billion or more in assets. There were 990 reporting institutions in the fourth quarter, down 11% from the third quarter.

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