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A Post Refi Boom Environment: Now the 'Fun' Begins.
For the past several months I've been contemplating writing a column about how the mortgage and housing markets have become a sustainable industry onto themselves. By that I mean the time has come that housing and mortgages are no longer cyclical - that these two industries (which go hand-in-hand) can be counted on for steady and predictable growth.
The key words here are "predictable" and "steady." For the past two years the mortgage and housing industries, indeed, could do no wrong. These two businesses (as most everyone knows) have been the twin pillars of the U.S. economy, preventing the recession from feeling really ugly while fueling job growth for those lucky enough to be employed in these businesses.
Many a consumer has saved a ton of money by refinancing their residential debt. (Smart multifamily owners have saved a ton of money as well.) And who cares that all the money consumers saved by refinancing has been gobbled up by higher real estate taxes forced upon them by ailing state and local economies? And don't forget higher natural gas and fuel costs. Yes, for some consumers (though they don't quite realize it yet) their big refi savings have vanished into thin air.
Yes, it seemed as though the good times would last forever and that the stock market would never, ever recover. Viva mortgage banking! Viva home sales!
At one point two months ago, I remember looking at the box only to see the yield on the 10-year Treasury (which mortgages are pegged to) falling to just below 3.2%. Later research discovered that at one point in intra-day trading the yield actually fell to 3.11% - a 45-year low. Hard to believe.
As I write this, fall approaches, and as most of you know (if you don't know you can stop reading now) the yield on the 10-year is north of 4.4%. As Fannie Mae chairman Franklin Raines recently pointed out to reporters, just 39% of mortgages are "in the money" to refinance as opposed to about 90% back in June. Ouch!
The weird thing about the pullback in the bond market is that ...
- Handling the refi boom. (refinancing market)(includes related articles on...
- Magazine article from: Mortgage Banking Schneider, Howard May 1, 1998 700+ words
...originated over the past few years - whose owners found January...more than a 'mini' refi boom," Bowen says. "The...paying off now. "This year's refi boom was much more manageable...they occur within four years of the loan's origination...
- Refi Boom Goes Sonic.
- Magazine article from: National Mortgage News Sinnock, Bonnie January 22, 2001 700+ words
...week. During the last refi boom, the index breached...The average 30-year fixed mortgage rate...for the rest of the year, which is would prolong the refi boom. David Lereah, the...reported that "30-year fixed mortgage interest...
- A Refi Boom Is a Refi Boom, Right? Wrong.(Brief Article)
- Magazine article from: Mortgage Banking CULVER, CURT June 1, 2001 700+ words
...just 2 1/2 years.) This...1999 refi boom was a different...1999, 30-year FRMs averaged...1999 refi boom, however...Nearly four years of production...had been 19 years-dating...rate on 30-year FRMs was...and the refi boom itself became...
- Mortgage Scene: Mega Servicers Start Your Engines: The Refi Boom Is at the...
- Magazine article from: Mortgage Servicing News February 1, 2001 700+ words
...drop. So, now that 30-year fixed-rate conventional...1.5 trillion production year, second only to 1998's record $1.55 trillion year. Whether we will actually...servicing club - this unexpected refi boom will create havoc for their...
- Refi Boom Might Still Have Some Legs.
- Magazine article from: Mortgage Servicing News Cornwell, Ted July 1, 2005 700+ words
...supposed to end. The refi boom, that is. Wake me up...commitment rate on 30-year fixed-rate mortgages...earlier, meaning many year-old mortgages could...average rate on 15-year mortgages was 5.20...historical trends for a post-refi boom environment. But with...
- REFI BOOM HEADACHES: FleetBoston takes hit on sale of servicing portfolio, but...
- Magazine article from: US Banker Muolo, Paul June 1, 2001 700+ words
...off-for the past six years. By the time it finally...servicing market, the refi boom is causing the "flow...there are five or 10 years left on a 30-year mortgage, why bother...selling bulk servicing the refi boom is causing problems...
- Refi Boom Leads to Hard Calls on Tech Spending.
- Magazine article from: American Banker Quinn, Lawrence Richter January 23, 2002 700+ words
...magnified during a refi boom. The Mortgage...against 17% in the year-earlier period...5 billion last year, according to...the next five years, but in the next...laid off when the refi boom ends, Mr. Colligan...doubled in the past year, with refis up...
- Aging refi boom nudges delinquency rate up. (Brief Article)
- Magazine article from: American Banker Kulkosky, Edward September 22, 1994 700+ words
...where they were a year ago. Warren Lasko...initial phases of the refi boom are now two and a half to three years old. History has...smaller than those of a year ago, a continuing...during the peak of the refi boom move into the danger...