Mortgages Up 10 Pct. in April

By Andy Meek

T.S. Eliot described April as “the cruelest month” in his classic poem “The Waste Land” – but for Shelby County’s mortgage market, April turned out to be a bit more positive than that.

Mortgage volume during the month topped $90 million, up almost 10 percent from April 2011’s total volume of $82.2 million, according to real estate information company Chandler Reports,

There also were more mortgages made during the month – 608, up from the 579 in April 2011. The average mortgage amount was up, too, climbing from $141,900 in April 2011 to $148,164 last month.

The backdrop for all that activity involves two important things to note, says Chad Cunningham, chief investment officer for IronHorse Capital Management in Memphis. First, he says banks are getting back to more normalized lending activity.

Second, many banks still have problematic balance sheets. So some of the lending that’s being done is still tempered at times by retrenchment.

“Mortgage credit is obviously incredibly cheap. Affordability indices are at highs,” Cunningham said. “But underwriting standards are obviously tighter today for those seeking mortgages. You can’t just breathe on a mirror anymore and get a mortgage.

“This results from several different factors. First, all things being equal, banks have returned to a more normal risk and lending posture. Second, many banks and lending institutions still have problematic balance sheets. They’re not in a position to go wild lending to homeowners. Appraisals have tightened up. This will loosen up gradually, but hard to imagine we’re going to see a major sea change in terms of loosening up of lending standards over the next few years.”

For those banks not burdened by bad balance sheets and troubled loans, though, now is the time to be making hay. As an example, Triumph Bank, which recently completed a capital raise of a little more than $12 million, is in the midst of a growth spurt.

Bank CEO Will Chase told The Daily News that money will partly be used to make new loans and add new hires, including in the bank’s mortgage department.

Chase envisions at least one additional position there.

Not surprisingly, Triumph’s mortgage activity is on an upswing. The bank went from $675,900 in mortgage volume in March to $2.3 million in mortgage volume in April, according to the Chandler numbers.

The top five lenders for April were Community Mortgage Corp., Magna Bank, Patriot Bank, Wells Fargo and Iberiabank. They collectively accounted for almost 40 percent of the month’s roughly $90 million in total volume.

The county’s broad mortgage market took a slight dip from March to April. There were 648 mortgages made during March, which then slipped to April’s 608.

Mortgage volume also dropped from a little more than $96.6 million to about $90 million from March to April.

Community Mortgage Corp. was the most active lender in April, with a volume of almost $10 million. That’s roughly the same as Community Mortgage saw in April 2011.

Regarding the market in broad terms, Cunningham added that inventory and structural factors will keep pressure on home prices, or least put a ceiling on prices for another few years.

“I think we’re in the later innings in terms of price declines, but there’s still more to go,” he said.

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