The flow of gloomy reports on loan originations by mortgage banks continued last week as two publicly held companies reported declines of 49% and 73%.
The 73% decline was reported by Plaza Home Mortgage Corp., Santa Ana, Calif.
It said originations fell to $227 million in September 1994, against $846 million in September 1993.
Jack French, chairman and chief executive officer, said, "While Plaza continues to restructure operations in its primary loan origination channels due to shrinking demand, we are continuing to expand our B-paper loan subsidiary, Option One Mortgage Corp."
In August, Option One opened an office in Columbus, Ohio. A Washington, D.C., office is scheduled to open later this month.
Lenders have been turning increasingly to B and C paper -- loans to people with blemishes on their credit records -- as a highly profitable specialty that can offset declining demand and tough new competition from portfolio lenders.
Fleet Mortgage Group has agreed to buy Plaza for $120 million.
It was reported to have asked Plaza to sell Option One before the acquisition but apparently changed its mind.
Plaza's loan servicing portfolio climbed to $8.6 billion as of Sept. 30, compared with $7.2 billion at the same time last year.
In San Francisco, Hamilton Financial Services Corp. said its Hamilton Financial Corp. unit had residential loan production of $302 million for the third quarter of 1994, a decrease of 49% from the $622 million funded during the comparable period in 1993.
Third-quarter fundings, however, rose 65% from the $183 million funded in the second quarter.
Loan originations totalled $783 million for the first nine months of 1994, compared with $1.5 billion for the 1993 period.
Hamilton does a mortgage business in 19 states and also brokers servicing rights and offers advisory services in mortgage banking.