How much did mortgage originations decline last year? The final figures from HUD are still awaited, but a good idea of what the yearend tally will show can be gleaned from California's 1994 numbers and those from other western states.
The total value of ARM loans originated by all lenders in California in 1994 rose only 1%. But fixed-rate loans fell 50%.
Taken together, the figures suggest a decline of roughly 40% in originations, pretty much in keeping with what most experts had been predicting. California has more than one-fifth of the nation's mortgage business, but the state's economy has been weaker than most.
Because of the shift toward ARMs, thrifts did better than mortgage companies, where business depends largely on fixed-rate loans.
The number of purchase loans at California thrifts increased 43% from the 1993 level, while other lenders had a 1% increase. The dollar value of loans originated by thrifts fell 16%, while other lenders showed a 48% decline. The thrifts increased their average loan size by 15% from 1993, while other lenders' loan size decreased 17%.
California thrifts increased their share of business from 17% of residential loan closings in 1993 to 26% in 1994, according to TRW REDI property Data, a real estate information company in Riverside, Calif.
Thrifts were able to hold on without many refinancings because of their penchant for the adjustable-rate loans that were popular last year. Of the 525,680 ARMs originated in California in 1994, 78% were by thrifts.
Purchases in Oregon, Colorado, Arizona, Texas, and Nevada increased 10.6% in 1994.
