Volume in Ginnie Maes plunged by some 72% in the first quarter from the year earlier period, to about $11.8 billion.
But a compilation by Mortgage Marketplace, an American Banker newsletter, showed that some big lenders significantly increased market share in the Government National Mortgage Association securities during the year.
Countrywide Funding Corp., Pasadena, Calif., jumped to No. 1 in the industry with a share of 17.3%, from 4.3% a year ago, by increasing its volume to $2 billion, from $1.8 billion. It was the only top company to generate more Ginnie Maes in the 1995 quarter.
Norwest Mortgage Inc., a perennial leader in Ginnie Maes, fell from first place but also made a big improvement in market share, going from 7.9% to 14.2%. Its volume for the quarter dropped by about half, to $1.7 billion, Mortgage Marketplace reported.
How can a company gain market share while seeing its volume drop by half? David Lereah, chief economist of the Mortgage Bankers Association of America, said many smaller companies were unable to deal with the downswing and went out of business.
The top four performers were the same as in the first quarter of 1994, but in different order (see accompanying table). In addition to Countrywide and Norwest, they included Prudential Home Mortgage and GE Capital Mortgage.
That Lomas Mortgage USA finished fifth, with $308 million in loans, was a bit of a surprise as the Texas company has continued to struggle financially.
Navy Federal Credit Union, the nation's largest, also showed up among the leaders, slipping into the No. 10 spot. Unlike others on the list, the Vienna, Va., lender made only Veterans Administration loans. Typically, the top lenders originate about two-thirds of their Ginnie Maes as FHA loans, and about a third as VA issues.
Prudential, one of the industry's powerhouses, showed a drop of about $1.8 billion in volume for the quarter, generating about $850 million of Ginnie Maes. But it is confident that the rest of this year will be better.
"We've seen a slight increase in our production throughout the first quarter," Steve Keldermans, director of secondary marketing, told Mortgage Marketplace. "We're expecting increases. People are getting used to rates now. Our sales force is out there."
The company expects to climb above $1 billion a quarter for the rest of the year, permitting the company to finish the year with $4 billion or more of Ginnie Mae production.
While mortgage production for all types of loans dropped by about 25% in 1994, the first quarter of last year was especially strong, marking the peak of the refinancing boom. In the first quarter of 1995, originations showed a drop of 40% from the level a year earlier but actually showed improvement from the fourth quarter.