Residential lenders funded just $8.8 billion in interest-only loans during the first quarter, a 72% decline from the same period last year, according to figures compiled by National Mortgage News. The fall-off in IO production was not surprising given the rising popularity of FHA-backed mortgages and the rush by borrowers to lock-in low fixed-rate loans that can be sold to Fannie Mae and Freddie Mac. Wells Fargo & Co., San Francisco, ranked first among all IO lenders, producing $2.39 billion, a 69% decline from 1Q08. Just one lender among the top 20 IO producers showed an increase in production. The rankings appear in NMN's Alternative Products Quarterly Data Report.
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