From Mortgage Professional America:
“Mortgage lending has hit a low not seen in 17 years as rising interest rates and spiking home prices keep borrowers at bay.
Mortgage lenders did a total loan volume of $226 billion in the first quarter – the lowest quarterly amount since 1997, according to a Bloomberg report. Wells Fargo and JPMorgan Chase, the nation’s largest lenders, reported multibillion-dollar plunges in their loan volumes.
Wells Fargo, for instance, had loan volumes in excess of $100 billion for seven straight quarters until June of 2013. In the first quarter of 2014, Wells saw only $36 billion in originations, Bloomberg reported.
JPMorgan originated only $127 billion in that time. The lender projected April 121 that it will lose money on mortgage originations this year.
Mortgage originations have been on a steady decline since the middle of last year, when the Federal Reserve’s discussion of tapering its stimulus cash caused interest rates to surge and put a chokehold on the refi boom. Meanwhile, a surge in cash purchases has pushed home prices steadily upward.”
In our area the real estate market is still very tight, so the difficulty home buyers are having successfully bidding on a home can mask the fact that the mortgage industry is in the middle of another collapse.
But the hard truth is that our industry is going to go through at least one more major contraction. When it’s all over, those of us left standing may be able to get back to just doing what we love doing – helping clients obtain the best possible mortgage for their needs and profile.
I’ll be covering this story more over the next year as news unfolds, because it is interesting, timely and important, especially if you care about where your next mortgage is going to come from and who will be your advocate, whether that’s one year from now or ten.
I deeply appreciate the support that you, my clients and strategic partners, have given me over the years that has allowed me to stay in this crazy business. I look forward to serving you again when the time comes.
My name is Casey Fleming. I am licensed to originate mortgage loans in California, and am based in Silicon Valley.
Author, The Loan Guide: How to Get the Best Possible Mortgage
C2 FINANCIAL CORPORATION
My Blog: www.loanguide.com