Falling Loan Rates Keep Lenders Busy
Mortgage lenders’ phones are ringing off the hook.
The frenzy was triggered by the Federal Reserve’s rate cut, which doesn’t directly affect mortgage rates, but did cause them to fall significantly.
Lenders, who have been battered by the housing slump, are enjoying the mini boom.
The volume of incoming calls jumped 50 percent Tuesday compared to the previous week “and all indications are that [Wednesday] we are even busier,” says Dave Doyle, the head of Countrywide Financial’s call centers.
Doyle says the only time he could recall that happening was in June 2003, when interest rates bottomed out after a series of rate cuts following the Sept. 11 terrorist attacks.
Countrywide staffers also were busy making sales calls to customers, trying to persuade them to refinance billions of dollars in tricky nontraditional loans into plain mortgages the company could sell.
One big sticking point for those hoping to refinance is the possibility that they won’t have 20 percent equity in their property after the refinance because the property has declined in value.
Source: Los Angeles Times, E. Scott Reckard and Kathy M. Kristof (01/24/08)
