In January and February, interest rates dropped as much as 1/2 percent over the course of a few weeks and the mortgage industry experienced a refinance boom like it has never seen before.
The result is now higher rates, confusion, turmoil and utterly inadequate capacity.
Lenders are not even close to being able to handle this huge influx in refinance volume.
Borrowers calling major banks are experiencing hold times of over two hours.
One major commercial bank is quoting underwriting times of over four months.
And some mortgage banks are refusing to lock in any refi loans at all (opting to focus only on purchase loans).
Yesterday, we saw all this come to a head when rates shot way up.
Rates went up partially in response to economic news but they also went up b/c lenders are trying to push away excess business that they simply can’t handle.
Some major mortgage banks are quoting rates that are well over 1% higher than what we quoted on Monday.
Our own quote below is a full 5/8th of a percent higher than our quote on Monday.
Lenders across the industry are pushing rates up until they clear out some volume and until they see what happens on a very tumultuous world economic stage with coronavirus concerns, elections, oil shocks and excess debt levels scaring the heck out of investors everywhere.
I should add that we are holding our own at JVM with no major service issues yet, particularly with our purchase loans.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167
