Mortgage Banking Firms Gain on Other Originators

Mortgage banking companies -- not commercial banks -- may be the new stars of home-mortgage originations.

For the second month in a row, mortgage companies topped banks, thrifts, and other originators in November 1990, the Department of Housing and Urban Development reported.

With many savings and loans foundering, banks have held a firm lead in originations for most of the past two years.

Fixed-Rate Specialists

But mortgage companies are clearly coming on strong. The companies, which sell their new loans, excel in fixed-rate mortgages -- currently the home loan of choice. And they have been actively pursuing home refinancings, on the rise since early this year.

"The vast majority of mortgage companies are having by far the greatest year in their history," declared Angelo Mozilo, chief executive of Countrywide Funding Corp., Pasadena, Calif.

The HUD data showed that mortgage companies accounted for 40% of originations in November. Banks grabbed 32% of the market, and savings and loans took 25%.

Just six months earlier, mortgage companies had 25% of the market, while banks and thrifts took 38% and 30%, respectively.

Some analysts are viewing the HUD report with caution. For one thing, they note that many mortgage companies are owned by banks and thrifts, clouding the market share data. Indeed, about two-thirds of the 100 largest mortgage companies are owned by either a bank or a thrift.

"It's interesting, but I wouldn't put a lot of stock in it," Michael Wilson, deputy director of research for the U.S. League of Savings Institutions, said of the HUD report.

Still, some experts say the data suggests that commercial banks may be losing some of their appetites for mortgages.

"I just don't see the banks as long-term players," said John M. Robbins Jr., chief executive of American Residential Mortgage Corp., a large independent company in La Jolla, Calif.

While safe, mortgages provide banks with low profit margins, he noted. "As banks become healthier, you're going to see them redirect their asset-acquisition strategies," he said.

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