This is the insane pool/patio video everyone is going crazy over

This is the insane pool/patio video everyone is going crazy over

Never expected our Facebook to blow up over one of these

Freddie Mac: Here are the top 5 improving metro housing markets

Not just L.A. and NYC

It’s official: Steve Horne out as Wingspan CEO

Jason Spooner takes over; Horne becomes senior advisor
W S
Lending
The Great Shift

Refi volume declines force market players to cut business

Purchase market will save the day

cutting_money

Big mortgage lenders are witnessing a dramatic shift in their mortgage production business, leaving many with no choice but to take a beating thanks to drops in refinancing.

It’s been a long-running trend of many companies cutting their mortgage staff as refi volumes drop month-over-month.

What’s forcing these companies to shut their mortgage production doors? Mortgage rates.

Mortgage analysts attribute the rapid tapering of refinance demand to sharp increases in mortgage rates, which forces the size of the refinance market shrink and, as a result, the refi boom that the market has witnessed is ending.

The country’s largest mortgage lender Wells Fargo (WFC) cut 20% of its mortgage production staff, with refinancing accounting for 70% of the bank’s mortgage applications during the first half of the year, but that has dropped to roughly 50% with an expected decrease to happen in the future.

As a result of the refi business decline ,the market is left wondering if this will be a permanent fix or a temporary shift in the mortgage environment.

"Some large banks such as JPMorgan Chase and Wells think the refi volume is likely to drop by more than 30% in the second half of the year," said Royal Bank of Scotland (RBS) Markets & Internation Bank analyst Sarah Hu.

She continued, "In anticipation of this, it might be inevitable for some banks to cut their mortgage staff in the short-term. But I'm not sure this trend will continue."

Going forward,  mortgage market growth will be heavily driven by home purchases.

As a result, the significant pick up in the home purchase sector, coupled by the recovery, are expected to offset the slowdown in a refinance market.

"Refi burnout is happening, but it’s happening at a time when the existing housing market is growing," said Rafferty Capital Markets equity research analyst Richard Bove.

He continued, "By the end of the year, the growth in the purchase market will surpass that in terms of mortgages being written in refi activity. In 2014, there will be an increase in the purchase market."

Recent Articles by Christina Mlynski

Comments powered by Disqus