SONYMA to issue $168 million in bonds to finance near-record first-time homeowner mortgagesMortgagePress.comSONYMA, New York, fixed-rate mortgages, Priscilla Almodovar,
The State of New York Mortgage Agency (SONYMA) has priced the
issuance of $168 million in bonds to fund near-record demand for
the Agency's low-interest fixed-rate mortgage loans, which are
available to low- and moderate-income first-time homebuyers
throughout New York State.
With the proceeds of this bond issuance, SONYMA expects to
purchase approximately $323 million in mortgages through Sept. 15,
resulting in 2,468 new mortgages to homeowners throughout New York.
This reflects a 76 percent increase from the $183 million in
mortgages purchased during the same period last year. New loan
applications (or reservations) for the first seven months of 2008
have also been running at record levels, indicating that mortgage
purchases for all of 2008 could approach SONYMA's record of $565
million. (Mortgage purchases typically lag behind reservations by
about three months.)
Priscilla Almodovar, SONYMA President and Chief Executive
Officer, said SONYMAs increased demand is due to program changes
and outreach made in 2007 and 2008 as well as a tightening of
credit by the private sector, which has encouraged more homebuyers
to seek out SONYMA mortgages.
"SONYMA has been able to respond to this surge in demand because
we streamlined our procedures and increased our outreach to the
lending community. By doing so, we remain a viable option in tough
economic times for working families who wish to find a cost-saving
and safe way to buy their first home in New York," Ms. Almodovar
said. "SONYMA's commitment to this market is part of the Patersons
Administration mission to make New York more affordable for
hard-working New Yorkers as well as to strengthen our
neighborhoods."
SONYMA offers a wide variety of mortgages, most of which are
intended for first-time homebuyers. Among the agencys most popular
products are 30- and 40-year fixed-rate mortgages that are
typically at least half a percentage point below conventional
mortgages. SONYMA's current interest rate is 5.875 percent for a
30-year mortgage with a three percent downpayment.
"During the last one-and-a-half years, SONYMA has made a
concerted effort to make our mortgages and our application process
more user-friendly," said George Leocata, SONYMA senior vice
president for single family programs. "We hired staff dedicated to
training lenders and others in the real estate community. We
simplified our procedures, implemented an online system to help
lenders, and created new mortgage products and tools to respond to
the marketplace. The result is more demand for SONYMA mortgages
than ever before."
The $168 million bond issue is SONYMA's second issuance this
year to fund its mortgages. Earlier this year, it sold $97 million
in bonds. With the continuing strong demand for SONYMA mortgages,
it is anticipated that SONYMA will issue another $250 million bonds
by the end of the year. The bond issue is expected to close later
next week.
The underwriter for the upcoming bond issue will be Goldman
Sachs & Company; bond counsel will be Hawkins Delafield &
Wood; and the financial advisers are Piper Jaffray Companies and
Swap Financial Group. cfX Incorporated is the Agencys cash flow
consultant.
SONYMA purchases its mortgages from participating lenders and
retains them for the life of the mortgage. It currently does not
sell its mortgages to third parties or financial investors.
The surge in volume has occurred in all regions of the state,
though the most dramatic increases have been in the downstate area,
principally on Long Island and in New York City.
For more information, visit www.nyhomes.org.
