Consumers are still hungry for mortgages, according to newly released figures from the nation's two biggest independent mortgage lenders.
Loan originations at Countrywide Funding Corp. grew to $3.2 billion in August, up nearly half from $2.2 billion a year earlier. Originations at North American Mortgage Co. were ahead by a third, to $802 million from $623 million
Executives at both companies credited their expansion efforts and a hardy housing market for the double-digit growth rates.
"Our retail-oriented consumer markets division was a key driver of production growth," said Angelo R. Mozilo, vice chairman of Countrywide, Pasadena, Calif.
John F. Farrell Jr., chairman of North American Mortgage, said its most significant increase came in the Midwest, where an expansion drive was begun in 1994. August applications there totaled $159 million, 130% more than a year earlier.
Industry experts were pleased by the increases but noted that the big jumps were from an especially poor year for mortgage lenders.
"Demand for loans will improve from the $500 billion (annual) rate of late 1994 and early 1995, but not to the record levels of 1992 and 1993," PaineWebber mortgage analyst Gary G. Gordon noted in a recent report.
Economists also expect a slowdown in lending, following July's record highs in home sales. "I don't see the sharp acceleration continuing," said John Silvia, chief economist at Kemper Corp., Oak Park, Ill. Sharp growth in loan originations "may give may to single-digit increases," Mr. Silvia said.
Countrywide, in addition to reporting loan originations, said its pipeline of loans in process grew to $5.2 billion in August, from $3.7 billion a year earlier. It was the seventh straight monthly increase, Mr. Mozilo said.
The company also said the value of its servicing portfolio grew to $126.4 billion in August, from $96.8 billion a year before.
Despite the gain, Countrywide is likely to fall to No. 2 in servicing nationally, displaced by the megabank envisioned in the plan to merge Chase Manhattan Corp. and Chemical Banking Corp. And if GE Capital Mortgage should be the successful bidder for Prudential Home Mortgage's $75 billion servicing portfolio, GE would emerge as No. 1, pushing the new Chase and Countrywide each down a notch.
North American Mortgage reported that loan sales reduced its servicing portfolio to $14.4 billion on 149,900 loans as of August, compared with $15.8 billion of servicing on 158,000 loans a year ago.
The Santa Rosa, Calif., company also said loans 30 days or more past due rose to 2.28% in August, from 1.93% to year before, and foreclosure rates increased to 0.33% from 0.29%.
A small company also reported a sharp rise in loan production. Advanced Financial Inc., Shawnee, Kan., said closings rose to $10.6 million in August from $8.3 million in July and $2.5 million in August 1994.
Advanced also said its pipeline of loans being processed rose to $26 million last month from $6.6 million at the beginning of the year.
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DALLAS - Capstead Mortgage Corp. raised its quarterly dividend 42%, to 74 cents a share.
The dividend is payable Sept. 29 to shareholders of record of Sept. 18.
In a press release, Capstead Mortgage said that the interest rate environment continues to be favorable and that it remains optimistic about the remainder of 1995 and next year.
The company said it agrees with forecasters who say that by spring the Federal Reserve will reduce short-term interest rates to 5%, from the current 5.75%.
The company said these reductions would result in "nice" increases in its common dividend in the next several quarters. However, even if short- term interest rates remained stable, the common dividend could increase "modestly" for a few quarters, Capstead said.
