mortgage business down in Hawaii

An article in the Pacfic Business News states "Hawaii mortgage business cooling fast". With the frantic refinancing boom largely over, Hawaii's mortgage businesses are either downsizing and/or attempting to maintain past lending levels by making loans to people with flawed credit histories and offering interest-only loans. Here are some highligts from the article:

Gayle Ishima, president of Mortgage Bankers Association of Hawaii, said "There's excess capacity in the industry and everybody is going after the same group. We used to do $75 million a month on average in 2003, now we're doing $50 million a month."

Statewide, the mortgage refinancing business started to cool when the Federal Reserve began hiking interest rates last spring. Still, mortgage lending in Hawaii hit $27.6 billion last year, up from $26.8 billion in 2003, according to Title Guaranty, which tracks the local mortgage industry.

Hawaii mortgage lending is expected to drop between 10 percent and 15 percent in 2005 as interest rates rise.

"The mortgage business is not what it used to be," said John Gray, Bank of Hawaii's executive vice president and mortgage banking manager. "We're down by 50 percent. We were doing half the business in 2004 that we did in 2003. But we're bullish on what we think this year looks like for us."

Hawaii Home Loans' Ishima said they have eliminated 10 mortgage-related jobs from a peak of 100 within the past year. Ishima said the company also is doing about $10 million less business a month than a year ago. "We've had a drop in mortgage business," she said, "but not as large a drop as a lot of others."