SAN DIEGO, Calif. -- American Residential Mortgage Corp. reported single-family loan originations of $619 million for May, a 22% decrease from the $796 million booked in May 1993 and 17% since April of this year.
New loan applications totaled $805 million in May. The pipeline of loans in process was $1.7 billion at month's end. May's refinancings decreased to 34% of loan production for the month, compared with 72% a year earlier.
For the year to date, originations climbed 47% to $3.9 billion.
But the strong downtrend this year, combined with increasingly difficult year-to-year comparisons, indicates a big downturn for Am Res for the full year, along with the rest of the mortgage banking industry.
"Rising interest rates in early 1994 have significantly reduced the demand for refinances. As a result, the total mortgage market has shrunk," said John M. Robbins Jr., chairman and CEO.
"In response, we are emphasizing those product lines that promise the greatest opportunity for increasing market share."
The company reported that it had closed satellite offices and laid off approximately 15% of its noncommission work force nationwide and that aggressive loan pricing and expenses associated with the downsizing would have a negative impact on second-quarter results.