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VOL. 123 | NO. 72 | Friday, April 11, 2008

Q1 Mortgage Filings Plunge 30 Percent

By Bill Dries

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Non-commercial mortgages for the first three months of 2008 were down by nearly 30 percent compared to first quarter 2007, according to The Daily News Online, www.memphisdailynews.com.

The numbers and the latest Residential Lender Analysis by real estate information company Chandler Reports, www.chandlerreports.com, suggests money is becoming tighter but not cutting off circulation completely.

The 8,927 non-commercial mortgages compares to 12,715 in Q1 2007 and 13,738 in Q1 2006. But the number represents an increase of 634 from the last quarter of 2007.

The Daily News tracks non-commercial mortgages - ones in which at least one borrower is an individual - including loan modifications and refinances.

Chandler Reports tracks residential loans in Shelby County recorded at the time of purchase.

A fourth of the mortgages were in the $50,000-$99,999 range, according to The Daily News Online. And almost the same percentage was for amounts more than $100,000 but less than $200,000.

"Our company is up about 20 percent. We're not down," said Lisa W. Reid, executive vice president and mortgage division manager at Magna Bank. "What we are seeing is an increase in (Federal Housing Administration loan) volume. Up to about 35 percent of our volume is FHA. Last year that was about 20 percent."

Drop, but not too steep

The total value of the 2,725 residential mortgages taken at the time of purchase in the first quarter of 2008 was more than $388 million, a 23.4 percent net drop from the first quarter of 2006. The average mortgage amount combined for all of the mortgages was $142,565 - 10 percent lower net than the first three months of 2006.

Wells Fargo Ltd. was the leading lender for residential loans in Shelby County, maintaining the lead it held in the first quarters of 2007 and 2006, according to the Chandler Reports analysis. The average mortgage amount dropped about $20,000 to $166,536 from last year at this time. Wells Fargo had 174 non-commercial mortgages compared to 219 in the first three months of 2007, according to Chandler Reports. The company's total loan amount was nearly $29 million.

First Tennessee Bank NA and First Horizon Home Loans doing business as First Tennessee Bank combined to be the second-highest lender at the time of purchase, with 158 loans totaling $25.8 million. Both the count and total price are down from the year-ago period, when First Tennessee/First Horizon had 197 loans totaling $38.2 million. In Q1 2006, the two combined for 235 loans totaling nearly $41 million.

Reid sees a continued market among first-time homebuyers who typically use financing instruments not affected by the crisis in subprime mortgages.

"Conventional financing has undergone a lot of changes," she said. "But the government has not at this point. The subprime has gone away and the first-time homebuyer market is typically an FHA market. So we're seeing an increase in FHA business.

"Rates are real low. They are still historically low prices and the values of the homes are more affordable. So, our first-time homebuyer program is typically FHA."

A word about Countrywide

" ... I think we have a pretty strong economic base that some of the cities don't have."

- Lisa W. Reid

Countrywide Home Loans' business in Memphis was off from a year ago at this time. There were 45 fewer mortgages at a lower average amount of nearly $174,000 and about $10 million less in the overall total from Q1 2007, according to Chandler Reports. Countrywide's loans totaled $20.2 million in Q1 2008, down from $30.7 million in the year-ago period.

The company's name is synonymous with the subprime crisis. Its parent company, Countrywide Financial Corp., is the nation's largest mortgage lender. It is in the process of being acquired by Bank of America. The New York Times and Wall Street Journal reported last month Countrywide Financial executives are the subject of a federal probe along with executives from more than a dozen other subprime lenders.

Federal authorities aren't commenting. Countrywide Financial executives have said they aren't aware of an investigation.

Caution, moderation, diversity

The Memphis mortgage numbers suggest caution and moderation as well as economic diversity are serving the Memphis market about as well as can be expected in a volatile economic climate.

Reid, who is a past president of the Tennessee Mortgage Bankers Association, said Memphis seems to be faring a bit better.

"Maybe a little better because I think we have a pretty strong economic base that some of the cities don't have," she said. "I think that has served us better as a first-time homebuyer market."

PROPERTY SALES 0 133 1,342
MORTGAGES 0 131 1,047