May was a very good month in the mortgage industry.
The nation's biggest mortgage banks posted gigantic leaps in originations and backed them up with continued strenght in the volume of applications.
The strong performance supports predictions that this will be another extraordinary year for mortgage loans.
Last year, originations reached a record of $850 billion, and projections for this year have been in the area of $800 billion. Mortgage banks have been accounting for about half the origination volume.
Lenders attributed the strong monthly figures to the refinancing boom that just will not die, and a substantial jump in purchase loans since the beginning of the year.
"There's a huge, I mean huge number - in the trillions of dollars - in mortgage over 9% that should be refinanced," said Jack French, chief executive of Plaza Home Mortgage Corp., Santa Ana, Calif.
American Residential Mortgage Corp., La Jolla, Calif., reported originations of $796 million last month, a 127% increase over last year's May tally of $350 million. The company's servicing portfolio grew to $10.8 billion, up 53% from $7.1 billion last year.
Apparent Staying Power
In a sign that the record-breaking activity may continue, American Residential's mortgage applications totaled $923 million, 104% higher than May 1992'2 $453 million.
Plaza posted a 58% increase over last year's origination volume as it wrote $750 million in new loans. The company recorded $1 billion in loan applications for the month, up from $662 million for May 1992. Plaza has a servicing portfolio of $3.4 billion, up from $2.3 billion at this time last year.
The two companies were not alone. Margaretten Financial Corp., Perth Amboy, N.J., posted a 92% increase over May 1992's originations. This year, it brought in $904 million in loans, against last year's $470 million.
Servicing Totals Grow
Loan applications were also strong for Margaretten, totaling $881 million, up 44% from May 1992's applications of $661 million. Loan servicing was at $14.9 billion at the end of May 1993, almost triple the $5.1 billion of May 1992.
North American Mortgage Co., Santa Rosa, Calif., the country's sixth largest mortgage originator, increased its originations to $1.5 billion, a 76% increase from May 1992's $829 million.
Loan applications also increased as the company took in $1.85 billion, a 63% increase over last May's $1.1 billion level. The company's servicing portfolio was 13.8 billion at the end of May 1993, a 58% increase over May 1992's $8.7 billion.
In yet another sign that reports of the end of the refinance boom may be premature, North America said fully 72% of its originations were refinances, up from 69% for the same period last year.
Countrywide Credit Industries Inc., the largest mortgage bank in the country, continued its long growth string. The company originated $4.1 billion in loans last month, 83% more than May 1992's $2.2 billion.