Ah, springtime. The flowers are in bloom, and for mortgage enders, the homebuying season is in full swing.

But no matter how strong the spring home-purchase season is this year - and it is indeed robust - mortgage lenders are almost too preoccupied with the fossilizing refinance business to even care.

American Home Funding Inc., for example, is enjoying a boost in loans for home purchases compared with last year, said Paul S. Reid, president and chief executive of the Richmond, Va., company.

But Mr. Reid said it's insignificant when compared with the dropoff American Home has had in refinance activity.

Less than 10% of American Home's loan volume is coming from refis, he said. He added that he is "amazed" at how far refinancing has fallen.

Industrywide, refinancings are accounting for 19% of loan applications, down from 57% last November, according to the Mortgage Bankers Association of America.

Nevertheless, loans for home purchases have been as strong this season as Mr. Reid had expected. He said most of the increased business has come from first-time homebuyers and lowincome borrowers.

The industry's time spent trying to educate younger and poorer borrowers about loans like those provided by Federal Housing Administration is finally paying off, he said.

Cutthroat Approach

Albert C. Kocourck, the president and chief executive of First Advantage Mortgage Corp., Columbia, Md., said lenders are reacting to the decline in overall production with a more cutthroat approach.

Loan pricing is as aggressive as he has ever seen it. He recently heard of a real estate broker getting visits from 80 lenders in one day.

Richard W. Richards, chairman, said an increase in homepurchase lending at Source One Mortgage Corp., Farmington Hills, Mich., has been coming from various regions.

Mr. Richards said California purchase activity is still off. Arizona's is a bit better. The Midwest's is "fairly decent." And the Pacific Northwest has become the hot spot.

Ronnie J. Wynn, the president of Colonial Mortgage Co., Montgomery, Ala., is more concerned about a shortage of homes for low-income and tinttime homebuyers.

People want to act on the spring buying season, he said. But a weak supply of homes is mining the atmosphere.

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