Refis, HELOCs boost Countrywide's loan production

A boom in nonpurchase loans helped Countrywide Financial Corp. boost residential mortgage loan funding in May to $44 billion, a 15 percent increase from last year.

Purchase loan volume for the year to date is down, but Countrywide has more than made up for that decline with a sharp rise in nonpurchase loans, including refinance and home equity loans.

At $18.6 billion, Countrywide's funding of purchase loans in May was up slightly from last year's $18.3 billion mark. For the year to date, purchase loans funded totaled $77.7 billion, down slightly from $82 billion at this time 2006.

Nonpurchase loans totaled $25.8 billion in May, up from $20.4 billion in the same month last year. Year-to-date nonpurchase loans totaled $122.2 billion, up from $98.6 billion in 2006.

Countrywide also reported that foreclosures pending, as a percentage of total number of loans serviced, totaled .71 percent at the end of May, up from .47 percent at the same time last year. Foreclosures as a percentage of unpaid principal balance were .9 percent, double the .45 percent rate in May 2006.

For the year to date, Countrywide has funded $203.9 billion in residential mortgage loans, up 12 percent from the $182.1 billion mark hit at the same point last year.

Countrywide has boosted production while cutting back on funding of "exotic" pay-option loans from $6.6 billion in May 2006 to $2.3 billion last month. Federal bank regulators issued new guidance for interest-only and pay-option loans last fall, which stipulated that banks should tighten underwriting practices and provide more complete disclosures to consumers when making such loans.

At $10.7 billion, production of adjustable-rate mortgages in May was down sharply from $19.7 billion in ARM fundings in the same month last year. Through May, Countrywide has funded $63 billion in ARM loans this year, compared with $90.7 billion at this time last year. Subprime loan production for the year to date is also down from $16.3 billion last year to $11.7 billion so far this year.

Fixed-rate mortgages accounted for 76 percent of monthly production -- the highest percentage since August 2003 -- and the pipeline of mortgage loans-in-process ended the month at $70 billion, its highest amount since October 2005, said Countrywide Chief Operating Officer David Sambol in a press release.

Countrywide reported a 17 percent increase in purchase loan fundings from April, although purchase loans for the month were up a more modest 2 percent on a year-over-year basis.

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