Mortgage brokers, lenders, and loan officers of all stripes might feel like they went through the wars last year, when plunging interest rates led to a boomlet of refinance applications, and rate locks stretched as far as 120 days in order to accommodate lengthy turn-around times.

But all that sound and fury may have signified… not much of anything.

Despite all-time record-low rates, overall mortgage originations actually declined in 2010 compared to 2009, according to an analysis of data provided by The Warren Group, publisher of Banker & Tradesman.

There were 305,528 originations in 2010, a 7.7 percent drop from 2009’s 330,942 originations. Refinance transactions powered the decline, falling 8.6 percent to 247,173 in 2010 from 270,295 originations in 2009. Purchase applications also decreased in 2010, falling to 58,355 from 60,647, a drop of 2.8 percent.

Those numbers were a substantial increase from the nadir of the crisis in 2008, whose 266,907 total originations were the lowest numbers in a decade. But compared to the 2003 boom – which saw approximately 750,000 refinances and more than 100,000 purchase applications in the state – 2010’s scramble looks almost like a drop in the bucket.

A Tough Game

Mortgage industry players said tougher underwriting and falling home values have played a role.

“First and foremost, it’s much harder to secure mortgages now than it ever has been,” said Brian Cavanaugh, a Boston-based blogger and mortgage banking consultant for MetLife Home Loans. “I get asked this question all the time, even with clients, and I say, ‘Just imagine you’re playing basketball. And you’re running down the court trying to score a basket on Kevin Garnett. That’s kind of what it’s like [getting a mortgage] right now.’”

Tougher credit checks and more extensive documentation of income are now required to obtain loans. That, in turn, means even borrowers who might have been considered good risks in prior years are having trouble qualifying, particularly if their circumstances and income have changed recently. And even borrowers whose credit is gold-standard have been stymied by declining home values, which means they don’t have sufficient equity to make refinancing worthwhile.

So while plenty of applications are coming in the door, fewer are resulting in loan offers.

“I think the consumer has such a hard time understanding just how difficult it is to go from submitting a mortgage application to going to a loan funding,” said Cavanaugh.

Bigger Pieces Of Pie

Slumping housing sales have also tilted originations more heavily toward refinancings, a segment of the market that often swoons or soars based on tiny ticks in interest rates, said Elizabeth Phelan, president of the Massachusetts Mortgage Bankers Association.

“In both cases, both in ’09 and ’10, we’ve seen surges based on the interest rates being as low as they were, but in concentrated periods,” Phelan said. “It made everyone very busy, but in concentrated pockets – not a flat, strong year.”

The decline in the number of licensed loan officers and lenders has played a role, too, according to Amy Tierce of Fairway Independent Mortgage in Needham. In 2009, there were 5,481 mortgage loan originators in the state; by late December of last year, that number had dropped to 3,010, a 45 percent year-over-year decline, according to a report by the Massachusetts Mortgage Association.

“The pie was smaller, but the slices of the pie were all bigger,” said Tierce. “We were really busy because it was so much harder to do the business, but we were also busy because there were less people to do the business.”

Phelan agreed, in part.

“Certainly there’s been shrinkage in the industry – numbers are down fairly significantly, and I think that’s partially due to lower volume,” she said.

But the riskier loan products that had powered the boom were “not sustainable,” for the industry, she said. “I think there are plenty of institutions and people out there ready and willing to take the loans,” said Phelan.