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Senate Democrats tried Monday to revive a mortgage refinancing bill, reintroducing a slimmed-down version of the measure in the hope of wooing Republicans.
September 10 -
Although Republicans appear open to a bill that would make it easier for borrowers to refinance their mortgages, Democrats are balking at requests that the legislation also include measures to reform Fannie Mae and Freddie Mac, among other things.
August 21 -
It's not too soon for CEOs to think about how they'll fill the profit hole sure to come when interest rates rise and the number of borrowers eligible to refinance ultimately drops.
July 30
The nation's refinancing boom has been plowing along for two years now — and just when it appears that everyone who could refinance has already done so, rates drop yet again, setting off another round of activity.
In 2011 mortgage bankers funded $1.5 trillion of loans, 66% of which were refis. For 2012 the industry is on track to originate another $1.5 trillion, but this time around refis are likely to represent 75% of the pie, maybe even more, according to figures compiled by National Mortgage News and the Quarterly Data Report. What's going on here?
Much has been written about the refi boom, but one avenue that has not been explored deeply is the "multiple" refi client — the consumer who refinanced back in 2010 or last year and who once again is coming to the well.
Exactly how many multiple refi clients are out there is hard to say. No one tracks that data point in particular. But as any loan officer well knows, on a large mortgage — one where the outstanding mortgage debt is $150,000 or greater — it doesn't take a large move in rates to save money.
Tom Piercy, managing member of Interactive Mortgage Advisors, a Denver-based servicing advisory shop, estimates the multiple refi number could be as high as 75% but he admits it's all guess work to some degree.
On jumbo loans, especially, a tiny change in the rate can save the mortgagor hundreds of dollars a month. But in today's ultra-tight underwriting market the key to closing a loan is home equity. And employment. The borrower will need to prove both.
According to interviews conducted by National Mortgage News the past week, several lenders confirmed they've been seeing quite a few multiple refis this year. Bill Dallas, chief executive of Skyline Financial, Agoura Hills, Calif., estimates 30% to 50% of his refis this year are clients who made a trip down the refi road the past two years.
Brian Benjamin, a loan broker based in Northern New Jersey, a stone's throw from Manhattan, said he's definitely seen repeat refi customers the past two years but admits, "We're running out of them."
Benjamin, the head of Two Rivers Mortgage, believes there are many potential refi customers out there but they cannot qualify because of tighter underwriting. "I've had 14 to 15 calls in the past day or two [about refis] but there's nothing I can do for them. These people are all jammed up for one reason or another," he said.
Benjamin is hoping the government will come out with a HARP 3.0 program geared toward non-Fannie/Freddie loans. (The change in LTV caps that came last year was dubbed HARP 2.0.) But he's not holding his breath. "If there's a new [presidential] administration we won't get it," he said. (The GOP is none too keen on government-backed mortgage programs.)
Jim Picard, vice president of Denali Alaskan Federal Credit Union, said he's definitely seeing multiple refi deals in his neck of the woods. "I've talked to two of the four big Alaska shops that have a big servicing portfolio and they are seeing a big increase in refinances of loans that closed the last couple of years," he said.
But there is another issue at stake here as well: churning. Are some loan officers aggressively courting past customers who in the end won't save much by refinancing?
"I don't believe in churning," one Connecticut loan officer told me, asking that her name not be published. "Truthfully, I don't think the market has moved all that much."
