MBAA - Annual Origination Volume Summation

According to the Mortgage Bankers Association's 2009 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation , commercial and multifamily mortgage origination volumes decreased 46 percent in 2009 among repeat reporters, with mortgage bankers reporting $82.3 billion of closed commercial and multifamily loans.

Commercial banks and savings institutions were the largest single investor group for commercial and multifamily mortgages - responsible for $19.8 billion, or 24 percent, of the closed loan volume. Multifamily properties were the dominant property type - representing $36.5 billion, or 44 percent of the lending total.

"Relatively few commercial mortgages were made in 2009, as the recession curtailed both the supply of and demand for new mortgage debt," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research.  "As the recession has receded, origination volumes have picked up slightly, but the absolute levels remain low."

Here are some key findings as it relates to the residential market

Decreases were seen across most property types and investor groups, and were led by declines in loans intended for Credit companies, REITS, mortgage REITs and investment funds, and Commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDO) and other asset-backed security (ABS) conduits.
$15.9 billion of multifamily loans were closed for Fannie Mae, a 32 percent decline from 2008.
$15.2 billion of multifamily loans were closed for Freddie Mac, a 24 percent decline from 2008.
$5.8 billion of loans were closed for FHA/Ginnie Mae, a 168 percent increase from 2008.
Loans for Fannie Mae and Freddie Mac accounted for 85 percent of the total reported multifamily volume in 2009.

While this data is historical (2009); we at PrivoCorp hope that the increased volumes resulting from the incentives by the Fed on first time home purchases, will result in improvement in the housing market which is one of the pillars of the US economy.

Good news for mortgage industry? ...New home sales jump from record low

According to the Associated press, sales of new homes surged 27% last month, bouncing off the previous month's record low and blowing past expectations as government incentives and better weather boosted sales.

 

The Commerce Department said Friday that new home sales rose in March to a seasonally adjusted annual sales pace of 411,000. It was the strongest month since last July and the biggest monthly increase in 47 years - this seems to be a very positive sign for the real estate finance industry as well.

Median prices of these homes were also up to $214k. For more information please check out the Yahoo!-AP website

The jump is probably the result of people trying to capitalize on the home buyers tax credit which has been used by about 1.8 million households and has cost the IRS $12.6 billion. This hopefully, is a small price to pay for the stimulation of the economy and creation of new jobs which will in turn get the engines of growth revving smoothly ... in short order.

PrivoCorp is looking to process more of these mortgages - and help these home buyers close on their homes faster.

BoA Chief to testify on Capitol Hill - BLEAK !!!

A few numbers from Barbara Desoer's prepared speech that will be made on the state of affairs of BoA's mortgage portfolio. Does not paint a very good picture though.

•1.4 million borrowers, or 10 percent of the entire BofA residential mortgage portfolio, are more than 60 days delinquent.
•More than 16,000 BofA employees are dedicated to helping troubled borrowers work out a solution.
•BofA has taken $10.4 billion in write-downs tied to mortgages over the past two years.

For more information check out the Charlotte Business Journal: Bank of America's Barbara Desoer paints ugly picture on Capitol Hill

Mortgage Market Question?

What are the current market conditions...? Is volume predicated by the Secondary Market, Int Rates, or Regulation?

My feeling is "Sh*t always rolls downhill" ... The Fed has slowed down purchase of MBS, hence, the secondary market has begun to tighten up. They see the exit strategy being not quite so easy come March. Investors (the BOA's and Wells of the world) are booking huge margins of profit on new loans. However, private money is who they will be answering to next. It's a good thing, but in the short term, it's gonna be rough. Watch the MBS ... everything else is truly "Secondary".