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Huntington Bancshares Incorporated Message Board

  • keypounder_52 keypounder_52 Jan 27, 2012 9:41 AM Flag

    Does anyone know for a FACT?

    if HBAN holds their residential mortgages in-house or do they ship them off to Fannie?????

    IF 2014 FED call holds, banks will struggle

    There's always car loans, etc but can you maintain a bank on just that?????

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    • It is unusaul for a bank the size of HBAN to portfolio mortgages if they qualify for a program where they sell the loan and retain servicing rights. Historically, a 15 year or 30 year mortgage would have an average life of 5 to 8 years. Loans that are made at these levels will not likely ever be refinanced, so they will likely be on the books much longer than in prior years. This would make a huge risk to the bank when interest rates on deposits rise - even if it does not happen for several years. HBAN would be better off to shrink deposits in the bank rather than retain 15 to 30 year loans under 5%.
      I know some divisions of Park National are offering 15 year mortgages that they will retain rather than sell - seems like an act of quiet desperation indicating they must have virtually no pipeline of meaningful commercial loans. Hard to see how that can work out for them.

    • Keeping the rate low has many benefits.

      1- Banks cost of money is almost zero.

      2- Customers can afford low rates and more customers are willing to get loan that produces more activity for banks.

      3- Low rates create jobs since investors have access to cheaper money. More jobs is goog for banks.

 
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