Countrywide Credit Industries captured bragging rights last year as the biggest originator of single-family home loans, and by a fairly comfortable margin.
The Pasadena, Calif., company reported originations of $49.5 billion for the calendar year, against $43.2 billion for No. 2 Prudential Home Mortgage Co., Clayton, Mo.
In a record year for originations, meanwhile, it took about $1.8 billion - a lot of mortgages for most institutions -just to get California Mortgage Co., Santa Ana, on the list as No. 100.
The No. 1 ranking is small solace for Countrywide, which is experiencing a humbling period of severe declines in business volume and the pain of slashing its staff.
A Punishing Turnaround
In that respect, Countrywide is like just about every other company in the mortgage banking industry. Nobody expected 1994 to match 1993, when more than $1 trillion of mortgages were originated. But nobody expected the turnaround to be so abrupt or so punishing, either.
Portfolio lenders, on the other hand, are likely to have a banner year in originations because of the new popularity of adjustable-rate loans, long their specialty.
The banks and thrifts have been marketing ARMs aggressively in recent months.
So the rankings in the table above will likely be shuffled significantly this year. Indeed, the rankings in originations have been marked by rapid changes over the last decade because of the cyclicality of the industry.
It seems likely that the top few companies - Countrywide, Prudential, Norwest, and Fleet - will stay near the top. So will No. 5 North American Mortgage Co., Santa Rosa, Calif., with $17.6 billion, assuming it remains independent.
But upward moves are likely from the portfolio lenders. Home Savings of America, Irwindale, Calif., is the biggest thrift but was only the No. 11 originator at $11.6 billion, almost all of it retail.
The giant Bank of America, with $10.6 billion, was in 14th place, and the No. 2 thrift, Great Western Bank, Chatsworth, Calif., was No. 18, and World Savings, Oakland, Calif., was No. 27.
One certainty is that the top companies will be competing for bigger slices of a rapidly shrinking pie. Most observers believe originations will shrink 30% to 40% this year from the record $1.01 trillion of 1993. David Lereah, chief economist for the Mortgage Bankers Association, foresees $712 billion in originations, while Joseph Hu of Oppenheimer & Co. is more bearish at $675 billion.
And at least one observer, Thomas M. Garvey, president of Chase Manhattan Personal Financial Services, projects the 1994 total at $555 billion, a plunge of almost 45%.
In the last two months, the major publicly held mortgage companies have already reported sharp drops in originations, both against those a year earlier and month-to-month.
A Glass Half Full
Countrywide, for example, reported originations of $2.29 billion in May, down from $3.04 billion in April and from $4.07 billion a year earlier. The monthly figures in 1993 then proceed to climb steadily, topping $5 billion in November and December.
Similarly, No. 5 North American Mortgage Co., Santa Rosa, Calif., reported a drop of 43% in May from originations a year earlier and 21% since April.
Some observers, however, prefer to point out that the glass of originations this year will be half full, not half empty. At worst, 1994 volume will likely be the third best in-history after, that of 1992 and 1993.
