4Q Lending Volumes Weakest of the Year, Refis Down

Mortgage bankers funded roughly $414 billion of new home loans in the fourth quarter, the industry's worst quarter of the year and an indication that production -- as anticipated -- will be weaker in 2010. During the quarter, refinancing volume represented 59.1% of all loans originated, the worst showing since 4Q08 when refis amounted to 44.4% of volume. According to figures compiled by National Mortgage News and the Quarterly Data Report, all residential lenders funded $1.9 trillion of loans in 2009, a 19% gain from 2008, a year when the housing and credit markets collapsed. If the 4Q run-rate keeps pace for the next four quarters, 2010 will turn out to be a $1.6 trillion year for lenders. But with interest rates expected to rise and Fannie Mae and Freddie Mac continuing to tighten their underwriting requirements (and fees), mortgage bankers are uncertain about the year.