June 22, 2009, Fort Worth, TX -- Initiatives of the U.S. government to boost the nation’s housing market, including record low interest rates and incentives for first time buyers, have created a lending boom in the mortgage divisions of Colonial Savings, F.A., headquartered in Fort Worth, Texas.

Colonial National Mortgage, the company’s retail origination channel, and CU Members Mortgage, the company’s credit union mortgage division, report a combined increase of 83.45% in the number of closed loans from January through May of 2009, compared to the same period in 2008. A total of 7,217 loans were closed in the first five months of 2009 for $1,287,731,821, compared to 3,934 units for $696,446,295 in January through May 2008.

While 77% of new mortgages took the form of refinances, government programs are also stimulating new home purchases, especially for first time buyers. The $8,000 first-time home buyer tax credit will apply to home purchases closed by December 1 of this year for qualified buyers. The tax incentive, combined with record low rates and an abundance of houses for sale in the market, has prompted many to take advantage of home ownership for the first time.

According to David Motley, President of Colonial Savings, both home buyers and those refinancing existing home loans realize that this is a advantageous time in the market. "For many, low rates and incentives make ownership possible for the first time or allow them to move up to a larger home, and that is good for our country’s economic recovery," said Motley. "Likewise, those who are refinancing to a lower interest rate on their existing home loans typically lower their monthly payments, and that frees up cash for other needs."

In addition, Motley says that the lack of a secondary market for sub-prime mortgages and other exotic loan programs has had very little affect on Colonial Savings’ mortgage business. "We’re a conservative lender that sticks to our strength, which is putting and keeping people in homes they can afford. And because we retain servicing on 98% of the loans we make -- collecting payments and managing escrow accounts -- we have long-term relationships with our customers. These days, it’s vitally important for homebuyers to know their lender is operating with integrity and is not just out to make a short term profit. We are proud of the fact that we have been able to fund this increase in business with our own capital and have not needed to ask the government for TARP or other "bailout" money."

About Colonial Savings

Founded in 1952, Colonial Savings F.A. is a national, multi-service financial institution headquartered in Fort Worth, Texas, and is one of largest servicers of mortgage loans in the United States, with a portfolio exceeding $12.5 Billion. It is the parent company of Colonial National Mortgage, a leading retail lender with 14 branches and a national Home Loan Center; CU Members Mortgage, which provides mortgage services to credit unions nationwide; Community Bankers Mortgage, which provides mortgage origination and servicing to community banks; and Colonial Savings, a network of seven banks located throughout North Central Texas. It is also affiliated with Colonial Life Insurance Company of Texas, DuBose & Associates Insurance and First Western Title Company. The privately held company provides a full array of personal financial products.

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