Lenders cheered as holidays take smaller than usual bite.

Even loan business gets cold during the holiday season.

"People aren't looking to buy a home; they're looking to decorate a home," said Christopher J. Sumner, president of Crossland Mortgage Corp., Salt Lake City.

But lenders are not experiencing the significant dropoff in purchase business seen in Christmas seasons past.

Lenders have been focusing for the past few months on reinvigorating their relationships with real estate agents and builders. The results - solid purchase business when seasonally adjusted - are doing more for lenders than egg nog.

Undramatic but Significant

Purchase volume has picked up slightly at Crossland, Mr. Sumner said. He quickly added, though, that it was nothing dramatic

"I really believe consumer optimism is key here," he said.

James A. Abbott, president and chief executive officer of First Union Mortgage Corp. in Charlotte, N.C., has also seen evidence of consumer optimism lately.

The minister of Mr. Abbott's church is moving out of her apartment and into a newly purchased home. Her reason: low interest rates, he said.

Storekeepers around Charlotte have told Mr. Abbott that "people are just coming into their stores with smiles on their faces," he said.

He said the increase in purchase business, especially around Charlotte, was "a good signal."

"People just seem more upbeat this year," he said.

Purchases over Refinancings

These anecdotal indications of consumer confidence are backed by more concrete evidence. While First Union has seen a 22% decline in overall volume recently, purchases now constitute a greater percentage of the lender's overall business than refinancings.

Purchase business also "held up pretty strongly" for Atlanta-based Gulf States Mortgage Co., said W. Scott Cavanaugh, senior vice president of production.

Mr. Cavanaugh expected total originations to fall by a third during this holiday season. Gulf States has hit that.

"Really, the only new business we have lost were refinances," he said.

|Back to the Basics'

He said Gulf States was staying strong in a weakening industry by "just going back to the basics and the fundamentals." His staff has focused on business from builders and real estate agents. And Gulf States has helped its cause by increasing newspaper advertising.

Mr. Cavanaugh said, however, that Gulf States feels, "our best advertisements are the people who represent the company at the point of sale."

Norwest Mortgage Inc., Des Moines, is one lender not sharing the holiday cheer. Pete Wissinger, senior vice president of production (east), said he was "disappointed" by recent total originations. Besides slackening business, he attributed the decrease in volume partly to confusing messages about the economy in the media.

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