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VOL. 129 | NO. 136 | Tuesday, July 15, 2014

Shelby County Mortgage Market Sees Modest Gain

By Andy Meek

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(Daily News File/Andrew J. Breig)

Shelby County mortgage lenders share a few common trends at the moment, as the area’s mortgage market begins to shake off the wintry chill of the first quarter.

Many of them report robust purchase mortgage activity, as refinances plummet to small fractions of their business. As a result of the demand, many of those lenders also have been adding mortgage officers to their ranks and plan to continue doing so.

The final common trend among some area lenders at the moment is a pickup in demand, which during the second quarter resulted in a small percentage bump in the number of mortgages made and a slightly larger percentage increase in total volume in Shelby County.

Local banks and mortgage lenders made 2,304 purchase mortgages during the second quarter, up 3.2 percent from the 2,233 mortgages during the second quarter of 2013, according to the latest data from real estate information company Chandler Reports, www.chandlerreports.com.

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

Mortgages averaged $178,237 during the quarter, up about 5 percent from the $169,247 average during the same period in 2013. And the total volume inched up about 9 percent to almost $411 million during the second quarter this year from almost $378 million in the second quarter of 2013.

The second quarter’s volume also represented a significant pickup from the $265 million in mortgage volume for the first quarter of 2014. And several bankers who spoke with The Daily News said that’s no fluke.

“Since March of this year, mortgage demand has been very strong,” said Evolve Bank & Trust president and CEO Scott Stafford. “We are currently experiencing large amounts of pre-qualifications from buyers that are in the market, and in some areas we’re seeing a shortage of inventory for buyers to purchase.

“As it stands now, Evolve is working on roughly 80 percent new purchases compared to this time period last year, when we were seeing nearly 60 percent of our borrowers refinancing. Because of such a strong demand, we have hired at all levels in our mortgage department – underwriting, processing and administrative.”

Likewise, Triumph Mortgage CEO Chuck Newell said that Triumph’s year-to-date mortgage volume is about 82 percent purchase. He said Triumph Mortgage also is continuing to look for experienced mortgage loan officers to keep its volume up.

“As far as the rest of 2014, through the summer and fall I see continued increase in mortgage volume,” Newell said. “We see especially strong activity in East Memphis, Collierville and Germantown. We saw a spike in activity in March and April – the first quarter was not as good – then that leveled out in May and June, and June was better than May. So we’re seeing a pickup. We’re seeing a steady increase.”

Year-to-date, the metrics for Shelby County’s mortgage market all are running above where they were at this point in 2013. To compare, the number of mortgages has grown from 3,857 to 3,923 during that period; the average mortgage amount is up from $164,892 to $172,255; and volume has grown from almost $636 million to almost $676 million.

The gain in mortgage volume during the second quarter stands in contrast to the fact that the county’s home sales took a step backward during the same quarter. Between April and June, there were 4,189 home sales, down almost 1 percent from 4,225 in the second quarter of 2013, according to Chandler Reports.

Magna Bank is another institution where business is strong but has shifted. To put its mortgage activity in context, Magna Bank president, chairman and CEO Kirk Bailey said at this point in 2013, 35 percent of Magna’s mortgage business was refinance activity.

Now that’s down to 10 percent. As a result of the corresponding purchase demand, he said, Magna also has hired a few new loan officers in 2014 and is still looking for mortgage lending professionals interested in joining Magna.

Looking at second-quarter mortgage activity at a selection of other Memphis-area banks, First Tennessee Bank was up by volume, growing to about $7.5 million and 21 mortgages during the second quarter of this year, compared with almost $6 million and 14 mortgages during the second quarter of 2013.

Independent Bank grew to 39 mortgages and a little more than $7 million in volume during the second quarter of this year, compared to 7 mortgages and a little more than $1 million in volume during second quarter 2013.

Iberiabank saw 127 mortgages and a little more than $25 million in volume, compared to 107 mortgages and almost $18 million in volume a year ago.

Among other lenders, Metropolitan Bank went from 25 mortgages and a volume of a little more than $8 million to 49 mortgages and a volume of a little more than $13 million, according to Chandler Reports.

Bartlett Mortgage grew its mortgage volume to $6.9 million, with 42 mortgages, from a volume of almost $6.5 million and 43 mortgages in second quarter 2013.

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

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