Toledo-area loans slowed in 2000 as refinancings slid

1/21/2001

Excluding extraordinary business loans, mortgages in Lucas County dropped last year, in part because higher loan interest rates curbed refinancing activity.

The higher interest rates, which reversed course this month, pared the number of home and business mortgages last year to 33,000, down 500 from the year before. But the total lent was $13.6 billion, up from $11.7 billion, attributed mostly to five $1 billion overlapping loans connected to the out-of-state purchase of Seaway Food Town, Inc., of Maumee.

Still, last year was the second consecutively in which many lenders reported lower volume and dollar amounts of mortgage, refinancing, and home equity loans, according to the county recorder's office. Four of every five mortgages issued last year were for less than $100,000, and virtually all were home purchases. The number of mortgages last year was 13 percent less than the 1998 figure.

“I think at the beginning of last year, you saw some pretty high interest rates, as high as 8.875 per cent, and that hurt,” said Michael Rose, executive vice president of Mid Am Bank. The Bowling Green-based bank made $222 million in loans last year, the highest in Lucas County.

Mid Am's numbers last year were off 17 percent from the $268 million it lent the previous year. The bank's refinancing activity amounted to about a third of all loans last year, down from half the year before, Mr. Rose said.

Said Sue Rioux, the county recorder, whose office handles mortgages: “We knew by October that the volume and dollar amount were down. I think everyone was just refinanced out by then.”

Part of what kept the dollar volume high is rising house prices, she said. Home prices have risen by, in some cases, 20 percent, and with new developments, seldom are mortgages of less than $150,000 sought for houses, she said.

Puffing up the mortgage values in the county were several business loans, for which the county records the entire loan amount even if only a portion of the purchase is in Lucas County.

The biggest mortgages last year were five $1 billion loans recorded by ABN Amro Bank, a Netherlands banking conglomerate, for Spartan Stores, Inc., of Grand Rapids, Mich., as part of its purchase of the Food Town grocery chain. Ms. Rioux said it is not unusual for major corporations to list all assets when securing a mortgage or refinancing loans and to file a mortgage application with that figure in each county in which it operates.

The lender landscape will change this year, given the pending acquisition of Capital Bank of Sylvania by Fifth Third Bancorp. Fifth Third issued the second highest amount of loans last year, and Capital finished fourth, mostly from commercial loans.

“We will be a powerhouse,” said John Szuch, chairman of Capital Bank, who is to become chairman of Fifth Third Bank of Northwestern Ohio in March when the purchase is completed.

“I think I figured on the commercial real estate side we'd have 40 per cent of the market.”

Still, most of the news about last year's mortgage industry is from smaller lenders locally and the emergence of national firms using the Internet to lure Toledo customers.

Northern Ohio Investment Co., a Sylvania-based lender, was one of only a handful in the top 20 with an increase from the year before in the number and amount of loans.

It issued $56 million in loans on 714 mortgages, up 16 per cent from $47 million in 1999 on 582 loans.

The increase is attributed to the types of mortgages it offers, many of which are aimed at first-time buyers and those who qualify for FHA and VA loans, said Ralph Vinciguerra, Northern Investment's president.

“We have mortgages that fit more types of people,” he said. “And the other part is educating our loan officers real well so they can get customers with the right type of programs.”

Good products, competitive rates, and a good staff were cited for the increase in loans by ABN Amro Mortgage Group, a subsidiary of Standard Federal Bank in Troy, Mich.

“We're running strong in Toledo ... because we have a number of special programs for low-income or first-time homebuyers and we hold seminars to explain all these programs and who might qualify for them,” said Mary Fowlie, senior vice president of community relations for Standard Federal.

Showing a 21 per cent increase in FHA loans, typically aimed at first-time homebuyers, was a good thing for National City Bank in northwest Ohio, said Ted Grambo, vice president/regional manager of the bank's residential mortgage department.

Refinancings, however, decreased, and home loans generally missed the bank's goals by 15 percent.

Among the 20 most active lenders in Lucas County last year were Household Realty, Beneficial Ohio, and Mortgage Electronic Registration System, which lists as its address a post office box in Flint, Mich.

The company issued $19 million on 197 loans in Lucas County last year, a nearly 1,000 percent increase from the loans in 1999. Officials from Mortgage Electronic could not be reached for comment last week.

Reduced refinancing and consumers' concern about a slowing economy in which fewer executives were transferred in and out of the area contributed to Charter One Bank's posting lower numbers in 2000.

The bank lent $174 million on 2,307 loans last year, down sharply from $238 million on 3,921 loans the year before.

Refinancing amounted to just a fifth of its lending, down from half the prior year, said Lee Dunn, president of the western Ohio division of Charter One.

Still, he's optimistic. “In the first 10 days of the new year, we did the same in refinancing applications as for the whole month of December,” he said.

National City's Mr. Grambo said the bank's application volume has spiked, with applications up 50 percent from December.

“A large percentage of those customers are refinancing,” he said.

Most active lenders in Lucas County
	2000		1999
	Dollars lent	No. of loans	Dollars lent	No. of loans
Mid Am Bank	$222 mill.	2,189	$268 mill.	2,412
Fifth Third Bank	$221 mill.	2,299	$269 mill	2,821
National City Bank	$211 mill.	1,704	$221 mill.	1,977
Lucas County (total)	$13.6 bill.	33,000	$11.7 bill.	33,500
Biggest mortgages in 2000
Lender			Amount
ABN Amro Bank - 5 loans, each for			$1 billion
Bank of America			$998.4 million
Bank of America - 2 loans each for			$800 million
Newcourt Commercial Finance			$700 million