The top 25 thrifts in mortgage originations increased their production sharply in the second quarter. from a year earlier.
The 25 thrifts wrote $26.7 billion of mortgages in the quarter, up 34.5%, an American Banker survey shows.
That stacks up well against the gains of rivals. Originations by all lenders rose 26%, to $270 billion, according to estimates by the Federal National Mortgage Association.
Reversing a Long Decline
The strong showing by thrifts was good news for the thrift industry, which has been experiencing a long-term decline in market share.
The thrift industry's share of total originations had fallen steadily in recent years as a result of failures, new capital constraints, and a decline in popularity of adjustable-rate mortgages. Adjustables are the specialty of many big thrifts.
Strong second-quarter increases were widespread among the top 25, with only a few showing declines. The biggest drop was 26.51% at Citibank Federal of San Francisco, a unit of New York's Citicorp, which has been retrenching in mortgages.
Rivals' Competitive Edge
Al the top of the list are Home Savings of America, Irwindale, Calif., and Great Western Bank, Chatsworth, Calif. Home showed a gain of 7.44%; Great Western, 41.19%.
Some observers said the second-quarter originations appeared especially strong in light of thrifts' competitive disadvantage against mortgage banks, which sell their loans in the secondary market.
No. 3 Plaza Home Mortgage Bank. Santa Ana, Calif., had a hefty gain of 58.19%. But Jack French, president, explained that Plaza operates primarily as a mortgage banker rather than as a portfolio lender.
One thrift showing an especially large gain, 141.26%, was Allied Savings Bank, Santa Rosa, Calif Allied, a unit of Redwood Empire Bancorp, also in Santa Rosa, is a hybrid that functions as both a portfolio lender and a mortgage bank, according to Terance O'Mahoney, president and chief executive.
"We're also a hybrid in terms of being both wholesale and retail," he said. "We're building market share by going into new areas. We're adding offices, and soon, we'll be expanding into Oregon from Northern California." Allied has five wholesale offices in California.
The company also said its strong originations were continuing into the third quarter. September volume more than doubled, to $215 million.
North American Mortgage Co., Santa Rosa, Calif., reported that its September 1993 loan fundings set a company record of $1.66 billion, for a 34% gain from the September 1992 total.
Loan applications in September 1993 also set a record, at $3.04 billion, a 46% increase from September 1992.
For the year to date, originations totaled $11.6 billion, a 42% increase from $8.11 billion in the same 1992 period. Year-to-date applications were $18.92 billion, up 33%.
Loan refinancings represented 71% of total loan fundings in September, against 74% in September 1992.
At Sept. 30, the company's owned loan-servicing portfolio totaled $15.4 billion, up 46% since Sept. 30, 1992.
Countrywide Credit Industries increased its mortgage production by 42% in September, from the September 1992 level. The company said originations climbed to $4.5 billion in the month and that its pipeline of loans in process edged up to $9.1 billion, from $9 billion at Aug. 31.
The company, based in Pasadena, Calif., also said its servicing portfolio stood at $74.1 billion at the end of September, up 42% in a year. Refinancings accounted for 75% of volume, and adjustable-rate mortgages accounted for 18%.