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Mortgage boom! – hurry up and wait
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We are in the midst of a mortgage refinance boom right now. With interest rate below 5% for many loans, home owners across the country are contacting their Lenders to take advantage of these historically low rates.
Please, if you are a home owner looking to refinance, HAVE PATIENCE. Lenders are overwhelmed right now with loan applications.
Mortgage lending is a boom or bust business. When rates are low, like they are now, many people refinance and buy homes. When rates are higher, there is much less buying and refinancing. Mortgage Lenders know this and staff their companies accordingly.
This is especially true right now. With the events in the housing and lending markets over the last couple of years, some Lenders have gone out of business, and most other Lenders have severely contracted their business and staffs. It is a dichotomy that when the overall economy is not doing well, the mortgage business typically is just the opposite. A bad economy usually means a reduction in interest rates, increasing the demand for mortgage loans. This happened in 2001-2002 and is happening now
With the very sudden reduction in interest rates – from over 6% average in early December to less than 5% in January, mortgage companies were caught unaware and unready for the sudden influx of business. Most are now scrambling to hire loan officers, processors and underwriters to meet the demand.
As an example, at my company, in the middle of December, my department had one processor to handle the loans from five loan officers. There was just not a lot of business. Now, we still have the five loan officers, but we now have seven processors, and we are all six and seven days a week to provide the needed service to all our customers.
And, where we usually will lock, or guarantee an interest rate for 30 days and have plenty of time to get the loan closed, we are now locking for 60 day and we often need every day of that time.
So, if you are waiting to get a response about your loan application, please understand that the loan officers and loan processors are not avoiding you or not answering your phone calls on purpose. There are just so many hours in the day.
One thing that may help you if you have lost your job recently- Mortgage Lenders are hiring. If you have any financial or lending background, look at Mortgage Lenders. You may find a new challenging career!
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