Industry News

‘Nontraditional’ mortgages rise as overall origination falls

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A slowing housing market has put a damper on first-mortgage origination volume for the first half of the year, an industry survey released Monday shows. First-mortgage origination volume decreased 16 percent in the first half of 2006, while strong demand continued for interest-only and payment-option mortgages, or so-called "nontraditional" mortgages, according to a survey from the Mortgage Bankers Association trade group. The 16 percent decrease in first-mortgage originations from the second half of 2005 was driven by a 10 percent decline in purchase mortgage volume and a 22 percent decline in refinance volume, MBA said. "In the context of a decelerating housing market and a slowing of overall mortgage originations activity, consumers continued to choose IOs (interest-only) and payment-option loans in the first half of 2006," said Doug Duncan, chief economist and senior vice president of research and business development for the Mortgage Bankers Association, which produced the survey...