Other Income Producing Activities
Narrative - March 1996, Procedures - March 1998
Comptroller of the Currency
Administrator of National Banks
Table of Contents
Risks Associated with Mortgage Banking
Statutory and Regulatory Authority
Management and Overall Supervision
Internal and External Audit
Activities Associated with Mortgage Banking
Mortgage Servicing Assets
Government-run and Government-sponsored Programs
Depository institutions have traditionally originated residential mortgage loans to hold in their loan portfolios, and mortgage
banking is a natural extension of this traditional origination process. Although it can include loan origination, mortgage
banking goes beyond this basic activity. A bank that only originates and holds mortgage loans in its loan portfolio has not
engaged in mortgage banking as defined here. Those activities are discussed elsewhere in the Comptroller’s
Mortgage banking generally involves loan originations, purchases, and sales through the secondary mortgage market.
A mortgage bank can retain or sell loans it originates and retain or sell the servicing on those loans. Through mortgage
banking, national banks can and do participate in any or a combination of these activities. Banks can also participate in
mortgage banking activities by purchasing rather than originating loans.
The mortgage banking industry is highly competitive and involves many firms and intense competition. Firms engaged
in mortgage banking vary in size from very small, local firms to exceptionally large, nationwide operations. Commercial
banks and their subsidiaries and affiliates make up a large and growing proportion of the mortgage banking industry.
Mortgage banking activities ge