The Pre-New Year's Edition:
In a few days the fourth quarter will be over, putting a lid on what will have been a record year for the residential finance industry. A year ago, lenders were bracing for a decent year but few anticipated that 2003 would turn out to be the barn burner that it was. In total, National Mortgage News estimates that mortgage bankers funded a record $3.83 trillion in 2003, 38% more than in 2002. The third quarter likely will stand as the peak of the market. It's no secret that refis swooned in the fourth quarter, but the purchase money market remained fiercely strong. Even though 2003 isn't quite over, NMN and its affiliate, the Quarterly Data Report, estimate that three firms funded more than $400 billion in 2003: Wells Fargo Home Mortgage, Washington Mutual and Countrywide Home Loans. NMN /QDR estimates that most firms saw their fourth quarter production drop by 50% compared to the record third quarter. If this assumption is "in the ballpark," that means Wells funded a mouthwatering $478 billion in 2003 with WaMu ranking second at $433 billion and Countrywide a somewhat close third with $421 billion. But these are estimates and estimates only. Production continues to be relatively strong at Wells and Countrywide, despite the decline in refis. Is it possible that Wells will surprise us all and crack the $500 billion mark in 2003? We'll know the answer in a few weeks...
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Instafi.com of Irvine, Calif., has bitten the dust. A refinancing specialist, the company closed its doors about two weeks ago. The lender, barely three years old, was founded by a former official at DiTech Funding. A number of title firms are owed millions, one competitor told us. For more details see the Dec. 29 edition of NMN...
Sandler O'Neill is initiating coverage of E-Loan with a "hold" rating, and has set a 12-month price target of $2.78 per share on the company. This represents a whopping 3.7% upside from the online lender's recent trading price...
WASHINGTON NEWS: Merry Christmas from Alan Greenspan to Fannie Mae and Freddie Mac: A new study from the Federal Reserve says the two's role in the marketplace reduces mortgage rates for conventional borrowers by just seven basis points. The report also questions whether their existence has any real role in increasing homeownership. Of course, the Fed put out a statement noting that the report -- penned by staffer Wayne Passmore -- does not necessarily represent the views of the central bank. Sure. And Santa Claus is on his way back to the North Pole as I write this...
CORRECTIONS: Two weeks ago in this column, the production volume of Lime Financial was incorrectly reported. Lime funded $140 million in 2003 and anticipates $750 million in 2004. In last week's column the name of HUD chief of staff Frank R. Jimenez was misspelled. Apologies all around.
WHAT ARE YOU THINKING CONT'D: Next week is another short one for the industry because of the New Year's holiday. We're conducting an informal survey on what you think the top three mortgage stories were in 2003. Just send a quick note to me at: Paul.Muolo@ThomsonMedia.com. Thanks for your time and effort and have a happy and safe new year.
