Even though residential loan production fell just 12% in the first quarter compared to the same period a year ago, the origination of Alt-A loans and interest-only loans plummeted, according to survey figures compiled by National Mortgage News (NMN).
Alt-A fundings, not surprisingly, totaled just over $806 million, a fraction of their former volume.
Non-GSE subprime production was non-existent in the quarter, according to the newspaper and its affiliate, the Quarterly Data Report. In 2008 Alt-A production totaled $60 billion with IO fundings at $100 billion.
Alt-A fundings peaked in 2006 at $612 billion. NMN also found that mortgage bankers originated just $8.8 billion in IO loans during the period, a 72% decline from a year ago.
In the current credit environment, before a residential loan can be originated it must meet underwriting guidelines established by Fannie Mae, Freddie Mac, or the Federal Housing Administration.