The latest round of never-before-seen lows in long-term mortgage rates and rate-indicative Treasury yields is bumping single-family residential loan volumes up another notch.
“It is pretty crazy these days. Volume has picked up tremendously, more so on the retail side of the business than in the wholesale/broker channel,” said John Walsh, president of Total Mortgage Services, Milford, Conn.
“We typically see that,” he added, noting that the third-party channel also is gaining with just a bit of a lag.
Both Walsh and Matt Clarke, the COO of retail lender Churchill Mortgage Corp., Brentwood, Tenn., said the 15-year product in particular has been gaining traction. (Churchill encourages borrower use of shorter-term products that cut their debt loads.)
Daniel Jacobs, president of retail branching at Residential Finance Corp., said rates have reached the point where they are motivating some fence sitters. For those that got a no-cost refinance a year ago, “another no-cost [loan] may make a lot of sense.”
“If they paid closing costs, it really comes down to the specific rate they had and loan size as to whether it’s worthwhile,” he said.
Paul Anastos, president of retail lender Mortgage Master, Walpole, Mass, said the recent rate/yield move shifted the company’s origination mix toward refinances and increased volumes. But he said the reaction is largely in line so far with that seen in response to previous drops to record low rates.
He said borrowers have been slower to react recently because they don’t tend to fear a sudden jump in rates.
Both he and Walsh separately said they have been beefing up their in-house operations to maintain service levels and turn times as volumes have risen recently.
“That seems to be the biggest challenge,” Walsh said.