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Chase adds no-closing-cost option to fixed-rate loans

National Mortgage Professional
Jun 07, 2006

Originations set new record in 2005MortgagePress.comRecord mortgage originations Commercial and multi-family mortgage bankers' loan originations set a new record during 2005 according to the Mortgage Bankers Association (MBA). Originations reported in 2005 were 48 percent higher than in 2004. The increase in 2005 was led by substantial gains among all property types, while commercial mortgage-backed securities (CMBS) conduits, commercial banks, life insurance companies and Fannie Mae led the increases among investor types. MBA also reported that loan originations in the fourth quarter were the highest ever recorded in MBA's quarterly survey. Fourth quarter origination volume was 16 percent higher than the previous quarter. "2005 was another record year for commercial and multi-family originations, with growth seen among almost all property and investment types," noted Douglas G. Duncan, MBA chief economist and senior vice president of research and business development. "The favorable conditions that led to records in 2005, such as continued low interest rates, an abundance of capital and a strong economy, should remain strong, as we progress through 2006. Year-over-year gains in nearly every category Originations by commercial/multi-family mortgage bankers during 2005 were 48 percent higher than in 2004, led by loans for hotel and industrial properties and CMBS conduit investors. Originations of multi-family loans increased by 44 percent in 2005 compared to 2004, while lending for office properties increased 46 percent and for retail by 34 percent. Lending for hotels grew by 230 percent. Loan originations for commercial banks in 2005 increased by 60 percent, for CMBS by 83 percent and for life insurance companies by 25 percent. Calendar year originations for Fannie Mae increased 25 percent compared to 2004, while originations for Freddie Mac, the Federal Housing Administration (FHA) and pension funds each fell. Multi-family was again the dominant property type, representing 36 percent of total 2005 originations. Office properties were the next most active property group, with 24 percent of the total, followed by retail properties, with 17 percent. CMBS conduits purchased the largest share of loans originated during 2005, 38 percent of the year's total. Originations for commercial banks were 21 percent of the total, loans for life insurance companies 18 percent of the total and the combined originations for Fannie Mae and Freddie Mac 12 percent of the total. Fourth quarter 2005 increases 58 percent from fourth quarter 2004 The increase in commercial/multi-family lending activity during the fourth quarter was across all property types. The increase over the fourth quarter of 2004 included a 65 percent increase in loans for office buildings, a 62 percent increase in loans for multi-family properties, a 63 percent increase in loans for retail and an 88 percent increase in loans for industrial space. The largest percentage increase in lending was for hotel properties, which saw a 112 percent increase from the fourth quarter 2004. Among investor types, commercial banks, life insurance companies and CMBS conduits drove much of the overall increase, although lending activity increased among almost all types. Mortgage bankers' originations for conduits increased 53 percent from the fourth quarter of 2004; originations for commercial banks increased by 70 percent and originations for life insurance companies increased 46 percent. Originations for Fannie Mae increased 63 percent, originations for Freddie Mac increased two percent, originations for FHA increased 32 percent, and originations for pension funds dropped by four percent from the fourth quarter of 2004. Fourth quarter 2005 increases 16 percent from third quarter 2005 The 16 percent increase in lending activity in the fourth quarter built on the third quarter's record origination volume. The quarter-over-quarter increase was led by large increases in multi-family, office and retail lending, which grew by 31 percent, 16 percent and 32 percent, respectively. The gains were widespread, with most property types and most investor types recording increases. MBA's quarterly commercial and multi-family survey of mortgage banks captured $67.5 billion in loans originations, during the fourth quarter of 2005, and $201.7 billion, during the entire year. For more information, visit www.mortgagebankers.org.
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