Perhaps Massachusetts has put the deepest doldrums of the recession behind it. What it looks like for lenders coming out the other side is still developing.
It is clear, however, that there has been change at the top of the residential mortgage market. Bank of America, once the largest bank in the country, and once by far the most prolific mortgage lender in Massachusetts, has been replaced at the top of the single-family mortgage category by Wells Fargo Bank.
But it’s not because Wells wrote tons of loans. In fact, it wrote 1,921 mortgages for single-family homes totaling $552 million in 2011. In 2010, it wrote slightly fewer single-family mortgages, 1,895, totaling $561 million.
By any measure, that could be considered a flat performance on Wells’ part. It took over the top Massachusetts residential mortgage lender spot not because it hustled its way past Bank of America, but because Bank of America cut back on residential lending so drastically.
Last year, Bank of America wrote 1,241 single-family mortgages totaling slightly less than $349 million, putting it in second place behind Wells. The prior year, when Wells did $561 million in volume – good for second best – Bank of America, already beginning to weaken its grip on the market, did $651 million in single-family volume.
‘Slow Going’
Still, despite BofA reducing single-family home lending by nearly half, lending across most categories was down, or flat, in 2011, and the lead players were mostly the same, according to Banker & Tradesman’s annual Top Lenders analysis of bank lending data provided by The Warren Group.
Rounding out the top banks for single-family lending in 2011 were RBS Citizens; Leader Bank; Sovereign Bank; Cape Cod Five Cents Savings Bank; Bank of Canton; USAA Federal Savings Bank; Lowell Cooperative Bank and TD Bank.
That cohort is only somewhat different from 2010’s top 10, and it includes other banks that saw significant decreases in single-family mortgage lending, including Boston-based Sovereign Bank, whose lending practices spent the year under the microscope of the Office of the Comptroller of the Currency.
Jon Skarin, executive vice president of the Massachusetts Bankers Association, said the relative flatness of the market in 2011 can be boiled down to a lack of demand.
“We’re seeing some improvement, but it’s still slow going. Demand is relatively weak,” Skarin told Banker & Tradesman. “It’s starting to come back. Companies are looking to expand, or do capital improvements or buy property, so the signs are encouraging, and delinquency rates are still really low.”
TD Bank’s single-family mortgage volume fell to $65 million from $81 million the prior year.
Commercial Interests
But TD’s $150 million in commercial lending, while down compared to 2010, was enough to maintain the second-greatest total among banks for 2011.
Rockland Trust retained its top ranking in commercial lending in 2011, but also saw its total drop slightly – to $191 million from $206 million in 2010.
TD Bank Greater Boston/Cape Cod Market President David Glidden told Banker & Tradesman the year started out slow and built “velocity” only well into the second half.
And much of that velocity came from business borrowers, Glidden said.
“We probably weren’t where we wanted to be (in 2011), or where we will be by the end of 2012,” Glidden said. “But we strengthened the number of businesses in our portfolio. Businesses are cautiously optimistic, underlining cautious. But they’re looking to borrow more. I don’t see the economy coming roaring back, but 2012 is going to be a good year for us.”
To see who really had a good year in commercial lending in 2011, one need only look to mortgage companies.
In both 2011 and 2010, Salem Five Mortgage Corp. occupied the top spot in commercial lending by mortgage companies. Last year, it did $44 million in commercial lending. The prior year, it did $51 million.
But the rest of the pack made serious strides.
In 2010, the mortgage company that did the second-most commercial lending was Farm Credit of Maine, which did $4.5 million in volume during the year. In 2011, it is (for all intents and purposes) Capital Funding, which did $9.3 million. Endeavor Financial Services was next with $8.3 million, followed by Citicorp Mortgage Inc. at $7.7 million.
Going Jumbo
Jumbo loans were one category in which results for the year were not flat. Not even close. Banks, credit unions and mortgage companies also got cranking on residential mortgages of more than $750,000 last year.
The top three banks in this category were Bank of America, which booked $426 million in volume on 330 transactions; Wells Fargo Bank, which did $336 million on 304 transactions; and First Republic Bank, which wrote $316 million on 253 transactions.
The previous year, the top three jumbo mortgage lenders were: Boston Private Bank at $109 million in 87 transactions; Needham Bank, with $100 million in 86 transactions; and Bank of America with $96 million in 82 deals.
Credit unions followed similar pattern. The top credit union jumbo lender in 2010 was the Harvard University Credit Union,
