Mortgage-origination volume is slipping for many midsize and smaller mortgage companies as interest rates continue to edge up, lenders say.
But behemoth lenders such as North American Mortgage Co., Santa Rosa, Calif., and Countrywide Credit Industries, Pasadena, Calif, have reported that origination volume continued to grow last month (see next page).
The experience of Houston-based Mellon Mortgage Co., appeared to be fairly typical of the less-than-giant companies. It reported a downturn of about 20% from October to November.
Thanksgiving Called a Factor
Similarly, Ira Cohen, executive vice president of Arcs Mortgage Inc., Calabasas, Calif., said, "There has definitely been a slowdown in the last two weeks."
According to lenders, in addition to higher interest rates, other explanations for the drop include Thanksgiving Day and the especially bad weather.
Mr. Cohen said interest rates were a major factor in Arcs' 15% drop in applications last month. Mellon's applications dropped about 10% to 15% last month, said Richard Solheim, president.
"It goes in line with what has happened with rates," Mr. Cohen said.
Charles W. Sewright, president and chief executive officer at Anchor Mortgage Services Inc., Wayne, N.J., said mortgage originations normally cool off during the winter months, as Anchor's originations, which are almost entirely in refinances, have done in November.
Increase at Margaretten
But "it was still a good month," Mr. Sewright said. Anchor closed a near-record amount of loans.
Loan applications rose at Margaretten& Co., Perth Amboy, N.J. In heavy activity, Margaretten originated $1.1 billion in new wholesale and retail loans last month.
That's $130 million more than Terence H. Williams, the company's executive vice president, had estimated. He attributes this to December business that is being "pulled" into November.
"It was a record month for us, beating the record of the prior month," Mr. Williams said.
American Residential Mortgage Corp. also had "still very strong" volume last month "in spite of a rise in rates," said Judith A. Berry, executive vice president and chief financial officer at La Jolla Calif.-based company.
"To tell you the truth," Ms. Berry said, "I think people make too much of the interest rates."
