2011 Mortgage Lending Volume Lowest In Over a Decade

January 26, 2012 No Comments »
2011 Mortgage Lending Volume Lowest In Over a Decade

You may have thought that mortgage lenders were raking it in, what with the record low mortgage rates currently on offer.

But 2011 was actually the slowest 365 days in mortgage lending since the year 2000, according to figures released by Inside Mortgage Finance.

The company noted that residential home loan origination volume totaled an estimated $1.35 trillion last year, which was down a hefty 17.2 percent from 2010.

The company attributed the weakness to a soft second quarter, when just $280 billion in new mortgages were extended to homeowners.

That was actually the weakest quarter since the end of 2008, when you know what hit the fan.

Around that time, interest rates on the popular 30-year fixed were close to 5%, which is more than a point above where they stand now.

Couldn’t Keep Up With Demand

Interestingly enough, many mortgage lenders have complained about having too much business in recent years, so it’s unclear if they actually wanted more volume.

It wasn’t long ago that Chase supposedly inflated its refinance rates to temper demand, partially because of reduced staff and more manpower directed toward things like loan modifications.

And back in 2009, Wells Fargo complained about the quality of the loan applications it was underwriting, hinting that it may have been hurting them more than it was helping.

Wells Fargo Top Mortgage Lender in Fourth Quarter 2011

Still, the San Francisco-based bank has retained its position as the top mortgage lender in the nation. The company originated $120 billion in mortgages during the final quarter of 2011.

Their market share increased from 27 percent in the third quarter to 30 percent in the fourth quarter. Wow.

They were followed (distantly) by JP Morgan Chase, which brought in a paltry $42 billion.

Coming in third was Citibank with $23 billion in mortgage loan volume. The New York City-based bank pushed ahead of Bank of America, which fell to fourth on $22.4 billion in loan volume.

Bank of America Mortgage Market Share Lower With Countrywide

Yes, you read that right.

Somewhat amazingly, Bank of America’s share of the mortgage market has actually fallen since it scooped up former mortgage lending giant Countrywide Financial.

BofA’s share of the mortgage market has dwindled to roughly six percent, which is less than the 7.8 percent share held back in 2007, before the Countrywide acquisition.

They gave Wells Fargo a run for their money in 2010, but soon after eliminated both their wholesale and correspondent businesses, with the latter providing about half of production.

Now the bank is left with a more focused retail arm, which makes mortgages in-house for its banking customers.

In the long run it’ll probably serve them better given how badly they’ve fared thus far. And they’ve got enough to worry about, what with all those foreclosures

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