Originations Slip as Correspondent Lenders Retreat

PRESS RELEASE

Originations Slip as Correspondent Lenders Retreat

DALLAS — (May 7, 2012) /PRNewswire/ First-quarter mortgage closings slowed and could fall further during the current quarter, according to Mortgage Daily’s Mortgage Lender Ranking. A third-party retreat at two big lenders hurt business, but another firm sees opportunity in buying loans closed by other companies.

Residential production was down 5.56% from the fourth quarter based on an analysis of origination data from firms that generate 83% of the country’s production.

But activity increased 10.88% compared to a year earlier.

“Business slipped, but annual production is on pace to exceed last year’s $1.3 trillion in total activity,” Mortgage Daily Founder and Publisher Sam Garcia said. “Two consecutive months of weak job growth, Spain’s debt crisis and the Fed’s ability to invest in more agency MBS has held rates down and lifted refinance demand.”

Fourth-quarter originations were $382 billion based on an average of three housing finance forecasts. Using the 5.56 percent decline rate, first-quarter volume came in around $361 billion.

Data reported in the Mortgage Market Index report from Mortech Inc. and Mortgage Daily indicate second-quarter production is poised to retreat around 8% from the first quarter.

FHA market share was roughly 15% versus the fourth quarter’s 13%.

Nearly 36% of all home loans were originated by Wells Fargo during the first quarter, making it the biggest lender.

MetLife Home Loans saw loan volume plummet 91% from the fourth quarter as it winds down operations.

Reduced correspondent originations had business down 48% at Ally Financial, while Citigroup’s departure from mortgage broker business had production off nearly a third.

PennyMac used the correspondent channel to push its production 80% higher — the best quarter-over-quarter performance by any billion-dollar producer.

Wells also dominated among servicers of the nation’s collective $10.3 trillion mortgage portfolio and was among the few to grow.