Operator
Thank you, sir. Our last question comes from Matt Burnell of Wells Fargo Securities. Your line is open.
Matt Burnell, Wells Fargo Securities
Good morning, gentlemen. Just a couple of questions on mortgage. I notice that production in the quarter was up about 20% year-over-year.
I guess I’m just curious if you could give us a little more color on your outlook for that business, particularly in the wake of what have been far more attractive mortgage rates throughout most of your footprint over the last few weeks and any guesses as to how long that may last.
Bill Rogers
Sequentially we were up about 4% from third to fourth quarter. And the fourth quarter was — re-fi was about 40% to 50% so it really wasn’t the big re-fi part yet. That’s fairly consistent with where we were. We’ve seen sort of some core parts of our business. Now, that being said, applications are completely different. Applications are 60%, 70% plus kind of re-fi. The first couple of weeks in January, particularly the last few days have actually been quite good, and so we’re seeing the potential there.
What I really like is where it’s coming from. So as you know, we invested in our consumer direct business, sort of think more online. Our core retail business, so it’s coming from our markets. We’re keeping our correspondent business sort of at about 50%, sort of where it was in the fourth quarter and sort of where it is now. It’s coming in our higher margin areas and we’re able to balance that.
I want to be careful about over-projecting. You can get excited about a couple of weeks and you can extrapolate numbers and get some big numbers as a result of that. But I feel good about where it’s coming from. I feel good about how we’re positioned to take advantage of it. And the last few days have been very good. People have responded.
As you would imagine, the denominator let’s say for total refinance is smaller just as you continue to go through a declining rate cycle that happens. But those that are eligible seem to be active.
Aleem Gillani
Matt, I’d add to that.
As you know, we’re a very good, efficient and effective servicer and we’ve been adding to our servicing portfolio over the course of the year. If you look at sort of end of 2013 to end of 2014, we’ve added about $9 billion to our servicing portfolio. And that’s generating a nice increase in servicing income for us as we take advantage of our competitive advantage.
Bill Rogers
And it is a good discussion too related to the efficiency ratio. So for example, if this heats up a little more than we think, it could be slightly dilutive to our efficiency ratio and accretive to our earnings. And we’ll make that trade right now. So that’s a good trade for us to make.
Matt Burnell
Just staying on the theme of fee revenues, just curious as to your outlook in the first quarter and if you have visibility a little further than that that would be helpful for the capital markets business.
That obviously was quite a good performer, this quarter has been pretty good in the second half of 2014. Just curious, given all the volatility in the markets right now what your outlook might be for the first quarter, first half in investment banking and capital markets.
Bill Rogers
Yes, since you stretched it to the first half, that will make it a little easier because there is some volatility and certain markets are more active than others and clients are coming back and sort of re-evaluating where they stand and what they want to do. But based on our pipelines, they look great. Our pipelines sort of continue that same momentum that we’ve had in the past. I just think quarter by quarter it’s going to look potentially a little bit different.
Ankur Vyas
Brad, this concludes our call.
Thanks to everyone for joining us today and if you have any questions, further questions, please feel free to contact the IR department.
Operator
Thank you for your participation on today’s conference call. At this time, all parties may disconnect.
