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CRE Originations Growing, Residential Strong

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Residential loan volume this year doubled last year’s level in one Florida region, while a one-million-loan milestone is expected soon at a Michigan-based lender. Production at all U.S. commercial mortgage lenders will likely exceed $90 billion this year, including more than $50 billion in multifamily originations.

A report from MORTECH LLC indicated that rather than focusing on production, lenders are preoccupied with compliance. A survey conducted by MORTECH reportedly found that smaller lenders were struggling with narrowing profit margins.

At The PNC Financial Services Group Inc., third-quarter earnings data indicated that first-mortgage originations rose to $2.7 billion from the second quarter’s $2.3 billion. But business at the Pittsburgh-based bank was worse than $3.6 billion in the third-quarter 2009.

The residential third-party servicing portfolio was $131 billion at the end of the third quarter, lower than $137 billion three months earlier and $158 billion a year earlier.

PNC’s commercial mortgage servicing portfolio was $263 billion on Sept. 30, off from $265 billion at the end of June and $275 billion at the same point last year.

Mortgage earnings rose to $98 million from $92 million during the prior three months and $91 million during the same period last year. Quarterly earnings at the parent company were $1.1 billion, better than the second quarter’s $0.8 billion.

Fremont Bank issued a Sept. 14 projection that residential originations will reach $4.2 billion during 2010. As of the date of the announcement, volume had reached $2.2 billion. Fremont acknowledged the impact of record-low mortgage rates.

Last month, Quicken Loans Inc. reported that it had funded 981,491 U.S. mortgages since 1985. In a promotion celebrating the upcoming one millionth loan, the Detroit-based company has awarded tens of thousands of gifts including 9,953 credit monitoring subscriptions, 1,105 Starbucks gifts cards and 215 Target gift cards.

More than $0.1 billion in mortgages were originated in the Central Florida market during July according to the Mortgage Central Florida Mortgage Report. Volume reportedly doubled 2009 activity and tripled 2008 production.

In its Quarterly Survey of Commercial-Multifamily Mortgage Bankers Originations, the Mortgage Bankers Association reported that third-quarter commercial originations were up 15 percent from the second quarter. Even more impressive was the nearly one-third increase from the same time last year.

Given the $82.3 billion in commercial mortgages closed in all of 2009 as previously reported by MBA, Mortgage Daily estimates that commercial mortgage production was $67.7 billion from Jan. 1 through Sept. 30. For all this year, commercial real estate production will likely be around $92.9 billion.

Conduits, life insurance companies and the two government-sponsored housing enterprises all saw gains in their third-quarter commercial real estate funding numbers. But commercial banks pulled back on originations.

Health-care loan fundings were 83 percent higher than the second quarter, while industrial mortgage production was 18 percent higher. Retail property originations were also up, but office lending was lower and hotel activity was down by more than half.

Multifamily financing was up by over half. Another recent MBA report indicated that multifamily fundings during 2009 were $52.5 billion. Using the latest MBA data, year-to-date multifamily volume was $39.1 billion and full-year 2010 apartment lending will likely reach $54.3 billion.

Third-quarter transaction volume at commercial mortgage lender HFF Inc. was 175 deals for $5.1 billion, minimally mixed from the second quarter’s 140 transactions for $5.3 billion. In the same three-month period in 2009, transaction volume was 113 deals for $2.5 billion. Year-to-date Sept. 30 volume was $13.0 billion.

The most recent activity included 106 debt placement deals for $2.9 billion, 45 investment sales for $1.9 billion, 14 structured finance transactions for $0.1 billion and 10 loan sales for $0.2 billion.

The Pittsburgh-based company’s loan servicing portfolio was 2,023 loans for $25.0 billion as of the end of September.

HFF said third-quarter net income was $4 million, better than $1 million a year earlier.

A spike in monthly activity was reported by Cambridge Realty Capital Companies, which said it had 33 loan origination requests for $0.5 billion in September. During the same month last year, Cambridge said it had 25 requests for $0.3 billion.

Cambridge reported that it processed 207 loans for $2.5 billion during the first nine months of 2010.

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