Many mortgage lenders

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Not good, exactly. But not as bad as they mighgt be, considering that home sales nationally have been in the tank sincd 2007 and that just three months ago, the global economy was teeterinfg on the verge of Not surprisingly, the latest figures for Business First’s 2009 list of the top 20 full-servic e mortgage lenders, based on volume of loans closed in shows that all but two lendere in the top 10 reported a lowert volume of loans closed. What is surprising is that seven of thoswe eight mortgage lenders reported that the totak dollar value of those loansd closed higher thanin 2007.
ranked firstf on this year’s list with loan closingds worth $605 million in 2008, up 22 perceng from $495 million in 2007. Despite that the number of loans closed fell 11 to 3,824 from 4,290. Several trendes explain the numbers, said Jeff Ratanapool, senior vice president and director of mortgage operationds forCentury Mortgage. A refinance boom begabn in January 2008 and went onuntil April, followesd by a lull that lasted until Ratanapool said. Six months in 2008 saw interesttrates decrease.
The possibility of falling rates led borrowerawith higher-interest mortgages to begin repositioning for refinancing, payinvg off or consolidating debt, he Interest rates for 30-year fixed mortgages dropped from as high as 6.7 percentg in mid-2007 to about 5.8 percent at the beginninf of 2008. Then they rose back to abouyt 6.4 percent in mid-2008 before plunging to abourt 5 percent at the end of the year as the Federak Reserve Board cut key rates to stimulatethe “Say you owed $160,000, plus a second mortgagee for $30,000,” Ratanapool said. “Aned say the first mortgage wasat 6.5 with a floating home equity line of credit.
” Dropping interesr rates for part of 2008 gave that consumedr — assuming he or she had a good credift score — motivation to roll all that debt together for a $190,00p loan at a much lower interestg rate. Though fewer peoplr took out mortgages thanin 2007, that 2008 mortgage Ratanapool used as an examplee was representative of many of the refinancingxs that went into the bookss at higher amounts than the loans they replaced, he & Trust Co. fell to No. 2 on this year’x list from No. 1 in 2008. The largest Louisville-baserd bank by assets reported 2,962 mortgages closed in down 16 percentfrom 3,530 in 2007.
The valude of mortgages closed in 2008 declinex 15 percent toabout $601 millio n from $706 million in 2007. Steve Trager, Republic’sa CEO and chairman, attributed the drop to decreasingconsumer demand. The No. 3 bank on the 2007 list was NationaloCity Bank, which was forced by federal regulators to merged with in December 2008. Amid increasingt investment losses and mortgage National City fellto No. 6 on this year’xs list. The dollar value of loan closed byNational City’s local offices fell 43 percent in to $287.7 million from $511 million in 2007. And the numbef of loans closed byNational City’s local offices plunged to 755 from 3,329.
PNC was not included in eithed list. The bank does not releasw individualmarket data, said Fred Solomon, a spokesman at the bank’s Pittsburgh headquarters. The No. 2 Louisville-based bank by & Trust Co., rose to No. 4 on the 2009 list from No. 5 in 2008. Stockj Yards reported the total value of 2008 mortgagezs risingto $445 million, up 4 percent from $426 million in 2007. But the number of mortgagea droppedto 2,049 in 2008 from 3,749 in a drop of 45 Carolyn Sachse, senior vice president and directoe of mortgage lending of Stock said the volume of loans decreased because the bank made fewer secondd mortgages, home-equity loans and home-equity lines of credit because of change s in internal underwriting and secondary markeg guidelines.
“In 2007, the secondary market and the bank wantesthis business,” Sachse said. But in 2008, “ift came to a stop,” partlgy because there were fewer buyers forthose loans. Becaused the figures include both commercial andresidential mortgages, they don’t reflectr that the average amount of a home loan remaine d at about $150,000, Sachsde said. Incentives, rates helpint Nationally, the outlook for mortgages seems to be Pending sales of existing homes rosein May, the thirc straight month, because of low mortgage ratee and a special $8,000 homebuyers creditr under the American Recovery and Reinvestment Act of 2009, accordingg to a report released Tuesday by the .
Century Mortgage’s Ratanapool said he expects mortgage rates to stay low for at leastf 12 months to18 months. But it will be more difficult for anyone except those with the best credit scoresz toget loans, he said, “and it will take longetr to get people through the (approval) Ratanapool predicts that housing will play a big role in the recovery, but for a completew recovery, he said, rates must remaih low. “The government has the to keeprates low. They can’f shut (the recovery) down before it gets Trager added that Republic already sees evidence ofa rebound.
Republic made $340 million in loans for the firstt quarterof 2009, including abouft $250 million in residential mortgages, he That’s up 30 percent from the firsty quarter of 2008, Trager added. Stock Sachse said a change that would benefit Louisville directly would befor government-backes mortgage agencies and to loosen lending guidelines for new When developers began the large downtown condo projects in mortgage money was flowing to consumers because thers was a secondary market for new condo mort­gages — a marke that dried up last year.
Now, lenders that make new condp mort­gages have nowhere to sell Sachse said, which is forcing developers to rent to keepcapitap flowing. Lending standards might have needed adjusting, she “but now the pendulum’s swungb too far the other way.”