Mortgage Informer

As many of the biggest U.S. banks continue to pare back their mortgage lending, some financial institutions see global financial turmoil as an opportunity to pick up market share.

The eight largest mortgage lenders, as measured by total volume in the first nine months of 2008, reported declines in originations from a year earlier, according to Inside Mortgage Finance, a trade publication in Bethesda, Md.

At Washington Mutual Inc., of Seattle, which had its banking operations seized by the federal government in September and sold to J.P. Morgan Chase, mortgage volume plunged to $33 billion, down 72%. Stronger lenders also saw a downturn, including Wells Fargo & Co., where mortgage originations fell 14% to $186.27 billion.

Sometimes perception and reality never intersect.

The former, emboldened by an increasing volume of buzz, begins to carry the weight of fact, pushing the latter into the shadows.

Perusing the Mortgage Bankers Association Web site on Friday, I discovered that has been happening as the residential real estate market continues to sag.

At least, that’s the MBA’s take.

In response, the organization created a “Myths and Realities” page to offer its view of the situation. Here’s a sample.

Myth: There is disagreement about whether allowing bankruptcy cram-down – reducing the loan amount to the property’s value – on primary residences will result in increased mortgage costs for consumers.

Expansion isn’t associated with mortgage lenders lately, but a Columbus company is bucking the industry slowdown.

Residential Finance Corp. plans to hire 75 to 100 workers in the third quarter, adding to its staff of 275 workers. Most of the jobs will be staffed in the area, where the company employs 220 workers, and some will be added to Residential Finance’s office in Tampa, Fla.

Neither Columbus nor Tampa, in states that have taken devastating hits from the nation’s mortgage crisis, seem like growth markets for mortgage lenders, but the company attributed its survival to a diverse portfolio.

A single sheet of paper has the real estate industry in an uproar.

Every time a potential home buyer applies for a mortgage, he or she receives a document known as the Good Faith Estimate, which spells out the thousands of dollars in fees the buyer is expected to pay when the deal closes.

The problem is the document is confusing, lenders use different versions, and there is plenty of room for abuse, if not outright fraud.

“The unnecessary complexity of mortgages has actually greatly contributed to our housing crisis,” says Brian Montgomery, assistant secretary for the Department of Housing and Urban Development. “We must do something to make mortgages more understandable and the process much more transparent.”