A sharp drop in purchase loan originations in the fourth quarter of 2015 — the product of compliance challenges posed by the implementation of the Consumer Financial Protection Bureau’s TRID (TILA-RESPA Integrated Disclosures) rule in October — was slightly offset by a small increase in refinance originations, according to RealtyTrac’s latest U.S. Property Residential Property Loan Origination Report.


According to the report, during Q4, nearly 1.6 million loans were originated on residential properties, with purchase originations accounting to nearly 39 percent of all originations and refinances accounting for nearly 43 percent of all originations.

Purchase originations fell 24 percent quarter-over-quarter, the biggest quarterly drop in purchase originations in more than five years, RealtyTrac said. Refinances also declined, with RealtyTrac reporting a 7-percent drop from Q3 2015, but they were still up 2 percent from the same period a year ago.

In addition to TRID implementation, RealtyTrac also pointed to normal seasonal factors, tight home inventory and new home formations in multi-family housing versus single-family housing as factors that contributed to the decline in originations.

Drop below average seasonal slump

Daren Blomquist, vice president at RealtyTrac, noted that the drop in purchase originations was still well below the average, 15-percent seasonal slump we’ve seen happen during Q4 in the last decade. Blomquist said weakness in some local economies could also be contributing to the decrease, “most notably in oil-producing markets such as Houston and Oklahoma City, both of which saw purchase originations decrease by double-digit percentages, both quarterly and annually.”

Houston and Oklahoma City posted 26-percent and 31-percent purchase origination declines, respectively. The Omaha area led the nation in purchase origination declines, with a 45-percent drop.

Some metropolitan areas experienced purchase origination increases, however. Nashville led the nation with a 79-percent increase, followed closely by its neighbors, Knoxville, which posted a 41-percent increase, and Memphis, with a 30-percent increase. Tennessee’s metro areas were tailed by Providence, Rhode Island, which posted a 25-percent increase, and Albuquerque, New Mexico, which posted an 18-percent increase.

Email Amy Swinderman.

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