Mortgage Production Jumped 24% in 2Q09, New Numbers Reveal

Mortgage originations jumped 24 percent between and the first and second quarters of 2009, according to new numbers released this week by Inside Mortgage Finance. Despite the surge, first half mortgage production came in just below $1 trillion, suggesting the mortgage market may be hard pressed to reach the $2 trillion full year volume that many mortgage economists have been predicting for 2009. Most of the growth in 2Q09 mortgage activity came in the Fannie Mae/Freddie Mac sector where the two government-sponsored enterprises saw a big jump in refinance volume. Together Fannie and Freddie accounted for nearly two-thirds of all mortgages made in the second quarter.

Wells and BofA Continue to Dominate Mortgage Activity in 2009

Wells Fargo and Bank of America posted a very strong second quarter in terms of mortgage originations, continuing their reign as the top two producers by far in the U.S. According to the latest Inside Mortgage Finance ranking published this week, Wells finished the first half as the top lender with $233.89 billion in new mortgage originations and a 24 percent market share, while BofA came in second with $203.6 billion in volume and a 21 percent market share. Together, the two mortgage giants now account for close to half of the new loans made in this country. Rounding out the top five mortgage producers in the latest Inside Mortgage Finance ranking are Chase in third place with $81.4 billion in volume, Citi in fourth place with $55.8 billion and GMAC in fifth with an estimated $31.2 billion.

NY and NJ See Biggest Growth in GSE Mortgage Volume in 2Q09

After trailing other big mortgage lending states early in 2009, New York and New Jersey posted the biggest growth in Fannie Mae and Freddie Mac mortgage production during the second quarter of 2009. According to Inside Mortgage Finance’s new “GSE Market Profile: First Half 2009,” New York’s government-sponsored enterprise mortgage production surged 146 percent between the first and second quarters while New Jersey’s volume jumped 109 percent during the period. These were the two biggest gains recorded by any top 10 mortgage lending state in 2Q09. In the current credit-impaired mortgage lending environment, Fannie and Freddie account for nearly three quarters of all new mortgages made in the U.S.

The “GSE Market Profile: First Half 2009” provides detailed information on the largest segment of the mortgage market broken down by state and lender. Click here for more info.

GSE Regulator to Discuss Controversial Appraisal Code

Alfred Pollard, General Counsel of the Federal Housing Finance Agency, will discuss his agency’s move to require Fannie Mae and Freddie Mac to adopt a controversial new appraisal code at an Inside Mortgage Finance audio conference next Wednesday, July 29, at 3 pm EDT. Fannie’s and Freddie’s new Home Valuation Code of Conduct has drawn considerable fire from both the mortgage broker and real estate industries. Joining Pollard in addressing the current appraisal controversy are Marnie Applegate, Senior Vice President at SunTrust Mortgage, William Garber with The Appraisal Institute, and Jerome Nagy with the National Association of Realtors.

The audio conference, “Coping with Appraisal Changes,” will also cover Fannie’s and Freddie’s recent moves to require a “market conditions” addendum supporting new appraisals. Click here for more info.

Mortgage Production Surged an Estimated 40% in 2Q09

Propelled by strong refinancing activity, residential mortgage production surged an estimated 40 percent between the first and second quarters of 2009 to reach some $625 billion in volume, according to preliminary numbers compiled by Inside Mortgage Finance. The second quarter’s originations appear to be the highest quarterly level seen since early 2007.

While all segments of the mortgage market seem to have benefited from historically low mortgage rates in the second quarter, the Fannie Mae/Freddie Mac sector appears to have posted the biggest gains. The estimated $625 billion in 2Q09 volume raised first half mortgage originations to about $1.07 trillion –a healthy 14 percent increase from the same six-month period a year ago.

Freddie Issues Appraisal ‘Best Practices’ to Help Its Lenders

In what is being viewed as a further toughening of appraisal requirements, Freddie Mac late last week issued new underwriting guidance that urged lenders to adopt a new set of “best practices” for handling appraisals.  The new guidelines spell out both appraiser and lender staff qualifications as well as appraiser selection. Significantly, the longest part of the new recommended practices relate to appraisal reviews and the steps lenders need to follow in monitoring the quality and accuracy of new appraisals.

Part and parcel of the new Freddie Mac appraisal guidance is assuring compliance with the recently implemented and controversial Home Valuation Code of Conduct. Inside Mortgage Finance is hosting an audio conference on July 29 at 3 pm EDT on “Coping with Appraisal Changes.” Click here for more info.