Magazine article American Banker

Wells Mortgage Unit First Lender to Top $100 Billion in Originations

Magazine article American Banker

Wells Mortgage Unit First Lender to Top $100 Billion in Originations

Article excerpt

By MARC HOCHSTEIN In early August, when Norwest Mortgage had surpassed its entire origination volume for 1997 at $56 billion, Mark Oman said he would be surprised if the company's volume for the year reached $100 billion.

Surprise!

On Wednesday, Norwest determined that Tuesday's $410.3 million of loans had pushed its volume for the year to just over $100 billion, with three weeks to go in the year.

During the summer the chief executive of what is now Wells Fargo & Co.'s mortgage unit said he expected a seasonal slowdown in the market for purchase loans. The refinancing market, white-hot at the beginning of the year, had slowed down as rates had come up. "Unless we had a pretty good rate rally, I didn't think we'd hit it," Mr. Oman said.

Lo and behold, the Russian crisis of late August shook world financial markets. Institutional investors dumped their holdings of corporate, junk, and mortgage-backed bonds and moved into U.S. Treasury securities, driving down interest rates.

And that fueled another burst of loan originations.

Once again, Mr. Oman stressed the importance of purchase volume in driving Norwest's record production levels.

"Every time rates drop down, it really helps the affordability for first-time homebuyers jumping into the market," he said. He added that there is a lot of "trade-up" activity by homeowners moving into bigger, costlier houses.

"Where we are, in the low to mid-6% range, you can afford a bigger house than you could have a couple years ago" in the 8% range, Mr. …

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