Magazine article American Banker

Tough Times Put Damper on Western Gathering

Magazine article American Banker

Tough Times Put Damper on Western Gathering

Article excerpt

The shrinking mortgage market dampened the mood at last week's secondary market meeting of the Western League of Savings Institutions.

Officially, registration at the event was down only 5% from last year, to about 1,000. But several participants said the conference seemed much smaller than in previous years, and lacked energy.

One executive from a small thrift, Jeffery M. Bond of Cenfed Bank, Pasadena, Calif., said many at the meeting were shopping for new jobs, in anticipation of cutbacks at their institutions. Downsizing continues, as lenders cope with the lower volumes that have followed the refinance boom of 1992 and 1993.

Another factor casting a pall over the conference: anxiety over the discounted adjustable-rate mortgages that thrifts made last year. The worry is that as consumers refinance into fixed-rate mortgages, ARMs will be paid off before thrifts have a chance to recoup the cost of making the mortgage.

Things looked a bit different from the vantage point of a large thrift.

Sam Lyons, senior vice president of mortgage banking at second-ranked Great Western Bank, Chatsworth, Calif., said lenders were upbeat, because they are well positioned to take advantage of the trend toward fixed rate lending. Like other large thrifts, Great Western has said it plans to be a player in the fixed-rate market.


As at most mortgage conferences these days, there was a buzz about the new technologies that Fannie Mae and Freddie Mac are rolling out.

Last year at this meeting, Freddie Mac announced its pilot automated underwriting system. That has since been rolled out commercially, and the agency is in the painstaking process of getting lenders to install it.

Neither agency made major technology announcements this year in San Francisco, but both unveiled incremental changes.

Freddie Mac said it would streamline the underwriting of the highest quality loans it buys. …

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