Mortgage Brokers Benefit From Lower Interest Rates

The Arvest Bank Group has a strong presence in each of the largest cities of Northwest Arkansas as well as in several smaller communities, so it’s not surprising that, collectively, its members made more loans in 1997 than any other group in the region.

The Bentonville-based group originated some 2,233 mortgages for a total value of $206.7 million in 1997. (Those figures include loans made by Arvest’s Oklahoma and Missouri banks.) Add in secondary market loans and the numbers climb to 3,522 for a total value of $308.9 million.

First Commercial Mortgage Co. and Federal Savings Bank have combined operations since the year ended. Those institutions landed at seventh- and eighth-place, respectively, on the Northwest Arkansas Business Journal’s list of mortgage lenders. But, if they had merged in 1997, the combined operations would have landed the bank in fourth-place with 685 loans valued at more than $53 million.

Lenders found a steady demand for home mortgages in 1997, but some say this year is shaping up to be their best year ever.

Ernie Penn, vice president in the Farmington office of Farmers and Merchants Bank of Prairie Grove, is one of them.

During the first five months of 1998, Penn says, his bank closed more mortgages than it did during the entire 12 months of 1997. He attributes that to favorable interest rates.

“Interest rates are much, much lower” than in previous years, Penn says. And, despite the stock market’s meteoric rise and fall, he sees nothing to indicate interest rates will move upward.

“Interest rates have been pretty solid,” Penn says. “There are no indications to justify raising rates.”

Simmons First Bank of Northwest Arkansas is among those banks working to build their share of the mortgage business. LeAnn Akers, vice president in charge of lending for Simmons, says the mortgage division is on track to see substantial gains in its department this year.