North American Mortgage Co. reported a bit of strength in its loan business in November and a principal reason was its arrangement to originate loans indexed to the cost of funds in California and Nevada for sale to Home Savings of America.
The Santa Ana, Calif.-based company had fundings of $459 million for the month, down sharply from the $2 billion in November 1993 as the refinancing boom peaked. But applications in the month rose slightly, reaching $830 million, and president Terrance G. Hodel said he was pleased.
"Our loan production volumes continue to reflect the difficult, very competitive mortgage environment," he said.
"I am encouraged, however, by our loan application volume, which was up slightly from October, despite November having one less workday. We are particularly pleased with the contribution our new ARM products have made to our application volumes."
Mr. Hodel said the added adjustable-rate mortgage volume was coming from both the COFI loans it is originating for sale to Home Savings and a number of new ARM products of its own.
The executive also said he expected a flurry of closings in December. He explained that people were usually slow to close on loans to buy homes, often taking 60 days or more. And the market has been heavily concentrated on purchase loans recently. But Mr. Hodel added that they like to close before the end of the year, so December should be a fairly strong month, he said.
For the first 11 months of 1994, loan fundings reached $9.2 billion, compared with $15.6 billion a year earlier for a drop of about 40%.
North American also reported that its servicing portfolio stood at $14.5 billion, a 20% decrease from the level a year ago. The weighted average coupon moved up to 7.50% in the year.
