Setting The Stage

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Th e M Rep o RT | 33 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t ORIGINATION the latest 2013 Originations down 14% The usual lenders topped the rankings, though all saw declines in volume. W hile mortgage origination volumes looked different last year compared to 2012, the list of top lenders looked very much the same. According to stats released by Mortgage Daily, residential loan originations were down 14 percent throughout 2013, falling 37 percent on a quarterly basis in Q4. Part of the blame for the decline can go to rising interest rates, which were up more than a percentage point to the high 4 percent range over the year. In full-year originations, Wells Fargo held on to its top spot, generating approximately $351 billion in loans— about 19 percent of last year's total volume, according to Mortgage Daily. JPMorgan Chase followed at No. 2 with $168 billion. Also in the top five 2013 lenders were Bank of America (BofA) ($90 billion), U.S. Bank Home Mortgage ($85 billion), and Quicken Loans ($79 billion). Together, the top five lenders accounted for about 43 percent of last year's activity. Looking at just the fourth quarter, the rankings were the same: Wells Fargo ($50 billion); Chase ($24 billion); BofA ($14 billion); U.S. Bank ($13 billion); and Quicken ($13 billion). All five lenders saw loan volumes decline quarter-to-quarter; in fact, out of all companies tracked by Mortgage Daily, only Stonegate Mortgage reported an increase from the third quarter. Total mortgage production for the first quarter is expected to be down 14 percent. Wells Fargo, Chase, and BofA also took the top three spots on the servicing side. As of December 31, Wells serviced $1.8 trillion, boasting a market share of 19 percent. Chase was second with $984 billion, with BofA following at $810 billion. Non-banks Ocwen and Nationstar took the fourth and fifth spots, servicing $465 billion and $393 billion in loans, respectively. The two servicers have been aggressive in their portfolio growth efforts, quickly climbing the ranks of top servicers and attracting attention from regulators who wonder if the companies are up to the task. millions more return to Positive equity CoreLogic estimates four million mortgages flipped right-side up in 2013. n early four million homes last year re- turned to a position of positive equity, leaving about 6.5 million upside-down, CoreLogic reported in March. As of the end of 2013, CoreLogic estimated the number of mort- gaged residential properties with equity totaled about 42.7 million, representing a share of about 86.7 percent. Due to a slowdown in the quarterly growth rate of the company's Home Price Index, the share of homes with equity versus underwater homes was mostly unchanged from Q 3 to Q 4. "The rebound in home prices in 2013 helped 4 million prop- erty owners regain at least some positive equity in their largest asset—their home," said Anand Nallathambi, president and CEO of CoreLogic. "We still have a long way to go to eliminate the negative equity overhang, but significant progress is being made every day across most of the country." Of those properties with positive status, just under a quar- ter—10 million—are considered "under-equitied," meaning they have less than 20 percent equity; more than 1.6 million have less than 5 percent equity. Not only does this circum- stance leave borrowers at risk of going back under should prices dip, but it also means they may have a more difficult time obtain- ing new financing for their homes due to underwriting constraints, CoreLogic said. As might be expected given their massive declines during the crash, Nevada, Florida, and Arizona topped the list of states with high negative equity rates, clocking in at 30.4 percent, 28.1 per- cent, and 21.5 percent, respectively. Following that were Ohio (19.0 percent) and Illinois (18.7 percent). Together, the five states accounted for 36.9 percent of negative equity in the fourth quarter. An examination of the top Core Based Statistical Areas (CBSAs) looked very much the same, with the Orlando-Kissimmee-Sanford area leading at 31.5 percent, fol- lowed by Tampa-St. Petersburg- Clearwater (30.4 percent). Also making the list were Phoenix-Mesa-Scottsdale (22.1 percent), Chicago-Naperville- Arlington Heights (21.4 percent), and Atlanta-Sandy Springs- Roswell (19.9 percent). The national aggregate value of negative equity for underwater homes last quarter was $398.4 bil- lion, down from $401.3 billion the prior period.

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