Monthly originations improved at New Century Financial Corp., but quarterly volume continued to slide.
March production of $5.4 billion was 35 percent better than in the previous month and 26 percent higher than a year ago, the real estate investment trust announced today.
Nonetheless, first quarter volume of $13.4 billion fell from the prior quarter's level of $15.7 billion and represented the second consecutive quarterly decline, according to the Irvine, Calif.-based lender's report. However, the total is $3.2 billion above the first quarter 2005.
Describing the first quarter results as "a strong start this year," New Century Chairman and Chief Executive Robert K. Cole added the company was "particularly pleased to have achieved a 31 percent increase in total loan production over the first quarter of 2005, with approximately 14 percent coming from organic growth in our nonprime division."
Nonprime originations reportedly represented 87% of the latest quarterly volume, while prime and Alt-A loans, which were not part of the production a year ago, comprised the rest.
"While the weighted average coupon on our nonprime product decreased modestly to 8.4 percent for March 2006 compared with the previous month, we are on track to meet our profit margin target due in part to tighter credit spreads and lower loan acquisition costs," Cole added. "We are pleased to see signs of a more favorable secondary market for our loans, as we have successfully entered into forward-sale commitments through June 2006 with gain-on-sale executions above 102."