Federally insured banks and savings institutions saw fourth-quarter earnings plummet 83 percent — their lowest levels since 1991 — and failed to boost loss reserves as fast as borrowers became delinquent on loans, the FDIC reported today.

Fourth-quarter net income fell to $5.8 billion at 8,500 banks and savings and loans insured by the Federal Deposit Insurance Corp., down from $35.2 billion a year ago. For the year, net income fell 27 percent, to $105.5 billion, as banks more than doubled loan loss provisions to $68.2 billion.

Fannie Mae and Freddie Mac are reportedly nearing agreement on a deal with New York’s attorney general that would require lenders to hire independent appraisers and provide copies of appraisal documents to a clearinghouse where their conduct and activity would be monitored.

New York Attorney General Andrew Cuomo’s office is investigating whether investment banks and other companies that sold securities backed by mortgage loans failed to disclose to investors and rating agencies that many loans did not meet minimum underwriting standards.

The projected annual rate of sales for resale homes fell 23.4 percent in January compared to the same month last year, and the median price was down 4.6 percent, the National Association of Realtors reported today.

The sales rate — a projection of a monthly total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity — hit its lowest level since the association began tracking combined sales of previously owned condos and single-family homes in 1999.

Bank of America officials have reportedly gotten behind a plan to create a Federal Homeownership Preservation Corp. that would buy billions in mortgages that might otherwise end up in foreclosure.

In a proposal to congressional lawmakers, BofA officials warn that up to $739 billion in mortgages are at risk of default in the next five years, and that the government intervention is needed, the New York Times reported.

BofA is backing a proposal by Sen. Chris Dodd, D-Conn., to create a government-chartered corporation that would buy up troubled mortgages from lenders and investors at a discount, and move homeowners into 30-year fixed-rate mortgages backed by Fannie Mae, Freddie Mac or the Federal Housing Administration (FHA).

Mortgage application volume posted a sharp drop last week as long-term interest rates gained considerably, the Mortgage Bankers Association reported today.

The group’s market composite index, a measure of home loan application volume, fell 22.6 percent last week on a seasonally adjusted basis from the first week of the month. Leading the decline was a 27.9 percent drop in the index that tracks refinance applications, followed by an 11.5 percent decrease in the purchase-loan index.