Ben Eisen at The Wall Street Journal says now that rates are solidly above 3%, “mortgage lenders are refocusing on home buyers to drum up business during a slowdown in refinancing.” (Wall Street Journal)
- Phones aren’t ringing anymore. Michael Menatian, owner of Sanborn Mortgage Corp. in West Hartford, Connecticut said “Last year and the first half of this year, we were flat out with refis, and the phones wouldn’t stop ringing,” However, now that most of those phone calls have been and rates are above 3% he says, “That pretty much has ended.”
- Data backs it up. According to Inside Mortgage Finance, purchases made up almost half of the loans that were packaged into government-backed securities and sold to investors in Q3. “That is the highest share since before the pandemic depressed interest rates and set off a record flurry of refinancing.”
- Customers are still plentiful. The housing market is still hot, rates are still low by historical standards, and there is still refi business out there. For example, Mentatian said he “has been phoning clients whose home values have risen enough that they can refinance out of their mortgage insurance policies.”
It’s all about preparation. Rates weren’t going to stay low forever. Lenders and loan officers who made sure to keep up relationships with realtor partners and purchase leads will have a great 2021 and beyond. However, those who went all in the refis at the neglect of maintaining purchase relationships could see business fall off a cliff.