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VOL. 127 | NO. 75 | Tuesday, April 17, 2012

Q1 Mortgages Up 12 Percent

By Andy Meek

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As the new year got under way, it didn’t look like Shelby County’s mortgage market was going to be ringing in 2012 with a bang.

By the end of January, the market was in pretty much the same place as it was one year earlier, with total mortgage volume barely budging (to $67 million, barely up from January 2011’s mortgage volume of $65.3 million).

However, that pace since has noticeably quickened, with buyers increasingly signing on the dotted line and mortgage bankers looking forward to what the future holds. During the first three months of 2012, banks and mortgage lenders in Shelby County made 1,587 purchase mortgages, up almost 12 percent from the 1,421 mortgages during Q1 2011.

That’s according to the latest numbers from real estate information company Chandler Reports, www.chandlerreports.com.

Data for this report included purchase mortgages only, not refinances.

Between the two first quarters, total mortgage volume in the area rose from almost $205 million in Q1 2011 to a little more than $226 million in Q1.

Lenders who notched gains in the number of mortgages they made during Q1 included Community Mortgage Corp. (from 166 mortgages in Q1 2011 to 190 mortgages in Q1), Magna Bank (from 98 to 133) and Patriot Bank (from 60 to 73).

Community Mortgage Corp. topped the list of the county’s busiest lenders, growing its total volume quarter over quarter from $24.2 million to almost $36 million, according to the Chandler data.

In its latest “beige book” offering an area market commentary, the Federal Reserve noted that the economy in the Eighth District (which encompasses Memphis) has continued to grow at a modest clip since the last beige book was released.

In line with the uptick in local mortgage activity, the Fed noted home sales were up throughout most of the district, including a 10 percent increase in Memphis.

Sam Goff, a loan officer with Evolve Bank & Trust, said he’s got about 20 files on his desk at the moment with preapprovals for home purchases. He attributes that, in broad strokes, to two factors.

First, Goff said the HARP II loan refinancing program (Home Affordable Refinance Program) is helping people with good credit scores refinance who previously were not able to because the value of their home is less than the amount of the mortgage they have left to pay.

“It’s the first program that appears to be living up to its publicity,” he said. “I’ve already closed a couple of HARP II loans. It does not reduce principal. I’ve got a loan right now going through the system, where the lady owes $145,000 and the home is worth $60,000, but she has a great credit score. There’s no risk here. She’s going from a 30-year that she’s five years in on to a 15-year loan.

“It’s not costing taxpayers one penny. It’s a beautiful program.”

Secondly, he said the purchase business has been dead for a while now – though the number of people who’d like to buy a home is still high.

“It’s like this reservoir that’s been building,” Goff said. “We’ve got a huge number of people who when the time gets right will enter the market. And our sense is the time is getting right.”

Mortgages for between $50,000 and $249,999 (the lion’s share of mortgages made during the quarter) are up about 15 percent, from 3,168 in Q1 2011 to 3,637 in Q1.

Nationally, mortgage applications dropped 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 6.

In an economic and mortgage finance commentary released in March, the MBA projects that 2012 will be a generally quiet year for home sales and mortgage originations. The association believes home sales will increase “only slightly” in 2012 before seeing bigger growth in 2013.

Chandler Reports is a division of The Daily News Publishing Co. Inc.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 87 87 14,804
MORTGAGES 80 80 19,410
FORECLOSURE NOTICES 22 22 3,817
BUILDING PERMITS 142 142 35,472
BANKRUPTCIES 62 62 14,096
BUSINESS LICENSES 62 62 5,053
UTILITY CONNECTIONS 99 99 21,532
MARRIAGE LICENSES 37 37 4,594

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