Magazine article American Banker

Smaller Crowds, Tighter Belts Seen for MBA Meeting

Magazine article American Banker

Smaller Crowds, Tighter Belts Seen for MBA Meeting

Article excerpt

Higher interest rates and a seasonal shift could result in some empty seats at this year's Mortgage Bankers Association convention in Boston.

With mortgage bankers across the country trying to trim costs to compensate for lower origination volumes, the MBA said it expects about 5,600 to attend, plus some walk-up registrants. About 6,000 people attended last year.

Fixed-rate mortgage originations, the staple of most mortgage bankers, are down, in favor of adjustable-rate mortgages. What's more, refinancing volume is substantially below last year's levels.

"We are certainly entering what looks like another ugly economic cycle, with overcapacity, predatory pricing, and everyone having to deal with all the problems of downsizing," said Christopher J. Sumner, president and chief executive officer of CrossLand Mortgage Corp. of Salt Lake City and the association's new president.

Refinancings, which last year accounted for up to 50% of lenders' business, account for only about 20% now, said Paul S. Reid, executive vice president of the MBA.

Originations are expected to slip to $1.29 trillion this year and $940 billion next year, from $1.5 trillion in 1998. And there was more bad news on rates last week. Freddie Mac said the 30-year fixed-rate mortgage jumped to 7.82%, from 7.70% the week before.

Henry Wilmore, senior economist at Barclays Capital, said he expects to see some "modest declines in both (housing) starts and home sales" in the near term due to higher mortgage rates. "The strength in the labor markets and income growth will offset some of the drag imposed by higher mortgage rates," he added.

Through February 2000, a seasonal decline in volume will put further pressure on the industry because people do not buy homes as actively in the winter months, said Dale Westhoff, senior managing director for mortgage research at Bear, Stearns & Co. …

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