Magazine article American Banker

Originations by Big Lenders Soared as Refinancing Spree Went into May

Magazine article American Banker

Originations by Big Lenders Soared as Refinancing Spree Went into May

Article excerpt

May was a very good month in the mortgage industry.

The nation's biggest mortgage banks posted gigantic leaps in originations and backed them up with continued strenght in the volume of applications.

The strong performance supports predictions that this will be another extraordinary year for mortgage loans.

Last year, originations reached a record of $850 billion, and projections for this year have been in the area of $800 billion. Mortgage banks have been accounting for about half the origination volume.

Lenders attributed the strong monthly figures to the refinancing boom that just will not die, and a substantial jump in purchase loans since the beginning of the year.

"There's a huge, I mean huge number - in the trillions of dollars - in mortgage over 9% that should be refinanced," said Jack French, chief executive of Plaza Home Mortgage Corp., Santa Ana, Calif.

American Residential Mortgage Corp., La Jolla, Calif., reported originations of $796 million last month, a 127% increase over last year's May tally of $350 million. The company's servicing portfolio grew to $10.8 billion, up 53% from $7.1 billion last year.

Apparent Staying Power

In a sign that the record-breaking activity may continue, American Residential's mortgage applications totaled $923 million, 104% higher than May 1992'2 $453 million.

Plaza posted a 58% increase over last year's origination volume as it wrote $750 million in new loans. The company recorded $1 billion in loan applications for the month, up from $662 million for May 1992. …

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