North American Mortgage Co., Santa Rosa, Calif., reported an increase of just 3% in loan originations in December. For the year, however, its volume showed a gain of 26%.

The annual gain, reported last week, basically mirrored what has been happening elsewhere in the mortgage industry. Countrywide Credit Industries, Pasadena, Calif., showed a gain of 23.2% for the calendar year, and projections by the Mortgage Bankers Association were for an industrywide gain of about 23%.

The narrow rise in December, though, represented a strong performance for North American. A year earlier, with interest rates much lower, refinancings were exceptionally strong. The company said December was its biggest month in two and a half years, with fundings of $889 million.

"For the year, all seven of the company's regions had increased loan fundings over 1995," said John F. Farrell Jr., chairman and chief executive of North American. "We are particularly pleased with the performance of our telemarketing group, the company's most profitable origination channel, where fundings in 1996 increased by 52% over 1995 figures."

North American said refinancings accounted for 46% of its loan volume in December, an unusually high figure relative to the industry as a whole. It also said refinancings represented 49% of December applications, indicating the high level of refis will continue into the first quarter.

The company's loan servicing portfolio continued to dwindle, falling 6% for the year, to $14.1 billion. North American has been selling all the servicing on its new loans to avoid interest rate risk, but the company indicated it may return to retaining servicing this year.

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