Originations Soar by 68%

WASHINGTON-Thanks to record low mortgage rates, residential funders originated $462 billion in product during the first quarter, a 68% jump from the dismal fourth quarter, according to exclusive survey figures compiled by National Mortgage News.

Refinancings and fixed-rate production dominated the business and many lenders are now reporting strong profits.

Also, this newspaper found that among the mega-lenders, firms that still use loan brokers were outproducing their competitors. For instance, Wells Fargo & Co. and Bank of America, ranked first and second, respectively, in originations during the period, with gains of 50% and 133% compared to the first quarter of 2008.

Both still have a wholesale/broker presence.

But the No. 3 and No. 4 four ranked funders - Chase and CitiMortgage - saw their volumes fall 28% and 40%, respectively. Chase has exited wholesale with Citi scaling way back.

At press time there were signs that a lack of available warehouse credit was restraining the ability of non-banks to originate new loans and compete against depositories.

John Courson, president of the Mortgage Bankers Association, denied that some lenders were turning business away, but said some non-banks are now "scheduling" loan closings to coincide with when mortgages can be pulled from warehouse lines.

"Some closings are based on line capacity," said Mr. Courson. "It's like they are rationing-out closings."

Even though loan volumes rose handsomely from the fourth quarter, compared to the first quarter of 2008, industrywide originations fell 11%.

Seven firms experienced a decline in fundings with the rest showing a gain. (See rankings in this issue.)