Last year, Bank of America doubled its home equity lending. However, despite continued growth in originations, the financial institution continues to reduce its home equity holdings.
During the three months ended Dec. 31, BofA’s home equity division produced $2.596 billion in new home equity programs, including the principal amount of the total mortgage line of credit. A surge of $2.420 billion was recorded in the third quarter of 2021, and $1.703 billion during the fourth quarter of 2021 marked an improvement.
The total volume of home equity production for 2022 was $9.591 billion, doubling the previous year’s $4.895 billion.
In the fourth quarter of 2022, the Charlotte, North Carolina-based firm reported an average drop in home equity FICO scores to 791 from 797 one year ago. A 58 percent combined loan-to-value ratio was achieved in average booked transactions, down from a 59 percent ratio in the previous quarter.
At year-end 2022, BofA had $26.563 billion in home equity assets on its balance sheet, down from $27.935 billion one year earlier. At the end of 2019, home equity investments accounted for $41 billion, and by the end of 2009, they accounted for $154 billion.
According to the bank giant, its net income dropped from $32 billion in 2021 to $28 billion last year.
Brian Moynihan, Chairman and CEO of Bank of America, said in a written statement that with an economy that is increasingly slowing, BofA ended the year strong in the fourth quarter, growing our earnings year over year. We delivered value to our deposit franchise through organic growth and rates throughout the year.
The number of employees at Bank of America grew last year. The number of people across all business lines surpassed 208,248 as of December 31, 2021, with 216,823 last month.