Norwest Mortgage Inc. solidified its No. 1 status in the securitization derby by selling $11.3 billion of loans to government-sponsored enterprises in the first quarter.
The new Chase Manhattan Mortgage Corp. jumped to No. 3 by virtue of its parent's merger with Chemical Banking Corp. And Prudential Home Mortgage fell out of the uppermost ranks as it slimmed operations in anticipation of a sale of its originations business.
The first-quarter ranking, compiled by Mortgage Marketplace, a sister publication of American Banker, looked at loan securitizations through the Federal National Mortgage Association, Federal Home Loan Mortgage Corp., and Government National Mortgage Association. The housing finance agencies purchase loans from originators and repackage and sell them as securities through Wall Street.
The ranking does not consider nonconforming loans, such as jumbo and subprime mortgages, that lenders securitize through private conduits like Residential Funding Corp. and GE Capital Mortgage Services.
But the first-quarter compilation serves as a barometer of borrower traffic, since the large lenders securitize most of their loans through the housing-finance agencies.
The figures demonstrated the strong concentration in the industry, with the top five lenders accounting for about a third of all agency securitizations and the top 15 just over half.
Virtually every lender handled more securitizations in the first quarter than in the fourth quarter of 1995. Norwest, for instance, saw volume grow by $2 billion since the fourth quarter, when the lender did $9 billion of business with the government-affiliated agencies.
The increase in securitizations is even more dramatic when looked at in relation to levels in the first quarter of 1995, when the industry was in a lending slump caused by higher rates that ended the refinancing boom. Countrywide Home Loans presented $9.5 billion of loans to be securitized in the first quarter of 1996, compared with $5.3 billion in the same period last year.
Between the fourth quarter of 1995 and this year's first quarter, Chase leapt from No. 8 to No. 3 with $4.6 billion of securitizations. In the fourth quarter, operating independently, Chase reported $1.8 billion of volume and Chemical Banking Corp. had $2.2 billion.
While Chase was ascending, Prudential Home Mortgage was descending, to sixth from third. Volume fell to $2.5 billion from $2.9 billion in fourth quarter.
Within a couple of months, Prudential's originations business will be sold to Norwest, further increasing the Des Moines-based lender's firepower.
Norwest currently deals more with Fannie Mae that Freddie Mac, but the lender isn't irrevocably locked into that proportion, said Mark L. Korell, Norwest group president.
The agencies' pricing, servicing, and other terms are constantly monitored, he said. "To avail ourselves to the lowest possible cost and the best execution, it's important to deal with Freddie, Fannie, and Ginnie."