S&Ls; Issue Record $21.8 Billion in Mortgage Loans During May

The nation’s federally insured savings and loan institutions issued a record $21.8 billion in mortgages in May, 23.6% higher than the same month a year ago, the government said Friday.

The Federal Home Loan Bank Board said mortgage loans closed during the first five months of this year amounted to $86.3 billion, up 20.5% over the same period last year.

The big jump in mortgage activity reflects sharp declines in mortgage rates this year that have spurred a rush to buy homes and refinance existing mortgages.

William B. O’Connell, president of the U.S. League of Savings Institutions, predicted that savings and loans would lend a record $233 billion in mortgages this year, topping last year’s $196-billion record by almost 20%.

He said that while the crush of mortgage applications had lengthened the processing time, “savings institutions are working hard to minimize any inconvenience.”

The report by the bank board said deposits exceeded withdrawals by $2.8 billion in May, a turnaround from the month before.

The bank board said the May growth in deposits, before interest was credited to savings accounts, compared to a $4-billion decline in April.

For the first five months of the year, deposits have grown $5.1 billion, 28.4% above the $3.9-billion increase during the same period in 1985.