Countrywide Financial Corp. improved production, but its pipeline of loans indicates a downturn is ahead.
Fundings of $41.1 billion in October increased 9 percent from September but were off 12 percent from the same month a year earlier, Countrywide announced today. The volume consisted of 218,733 loans.
Purchase loans accounted for $17.3 billion of October's fundings, while adjustable-rate loans represented $15.5 billion, the Calabasas, Calif.-based lender reported. On a consolidated basis, $4.3 billion of the month's loans has a pay option feature.
"October operational results reflect both seasonal and economic mortgage market conditions," said Chairman and Chief Executive Angelo R. Mozilo in the announcement. "As a result, purchase activity has started to slow. However, following the drop in interest rates during the month of September, October refinance activity increased to $24 billion -- the highest dollar volume since October 2005."
The correspondent channel contributed $19.4 billion of October's originations, the consumer markets division added $13.7 billion, brokers aggregated $7.5 billion and the remaining volume came from capital markets, according to the announcement.
Home equity loan fundings decreased $0.2 billion from September to $3.6 billion, while nonprime production increased $0.2 billion to $3.3 billion in October, the company said.
The mortgage pipeline at the end of October was reportedly $61 billion, off about $4 billion from the prior month.
The $1.26 trillion servicing portfolio had a delinquency rate of 4.43 percent, Countrywide said. Meanwhile, the rate of foreclosures pending was 0.56 percent.