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Show Page 10b The Enterprise Review, April 28, 1976 OMR (OUTSIDEI by PatrickJ. Vaculin Origination costs between 1972 and 1974 soared 36 percent on average per loan while servicing costs rose at a slower rate of 18 percent according to theWeather-vane- nesses such as industrial banks and retail stores. The effect of these moves may soon have an important impact on the market. Sears stores have proposed bringing in or starting their own real estate and mortgage banking companies. This would give the consumer one stop shopping for all his housing needs. , the Mortgage Bankers Association publication. The article reports half the firms in the survey will never be able to recover origination losses out of net servicing income. Looking hard at these . figures, we' must recognize that the major impact on mortgage banking operations has been due to inflation. Recently, mortgage banking companies have been able to compensate for the inflation-- ' ary problem by diversification of their operations. More and more companies are turning to real estate development, construction, appraisal work, private and corporate law practice, and title work. Some companies have even ventured into unrelated busi EXPENSE RISES MORE THAN ORIGINATION VOLUME OF SINGLE-FAMIL- MORTGAGE Y ONE-THIR- 1972 TO 1974 D, LOANS CLOSED (MILLIONS OF DOLLARS) fwi and gross warthouso mttrtst eipcnst. ttlFor 1972 and 1974 date, ft $50 iwHion and over size group mod in earlier years was into $ 50 to $ 100 nuHion and $ 00 miUton and over size groups flEacludmg FNMA and GNMA SOURCE: Mortgage Banking Survey of EXPENSE SERVICING Loan Operations, 1974. ly Single-Fami- broken INCREASES, 1972 TO 1974 T s q! 0 i 1. 200 SIZE i !: b. r, I i v. - ... .I i 400 OF SINGLE -- FAMILY - J 600 800 PORTFOLIO E ickjdtng ompMuatioii pf coif of purchowd tfmcmg For 1972 and 1974 dato.tht $400 miiiun and mie $400 to $100 minion and $800 million and oner or 1,(00 l i 1,200 1,400 (MILLIONS OF DOLLARS) mi group utd m rprlicr years wot proton groups mo and Research Department We may soon see such diversification by local mortgage bankers if costs and inflation continue to soar as in Below are two the past. graphs that illustrate the im- - |