What the hell is going on out there???

Simple, market conditions have increased loan volumes by over 50 percent and many major investors have not been able to keep up. The Federal Government has turned on the spigot and they are forcing interest rates down. This has created a refinance boom that, quite frankly, the industry cannot handle. It is projected that the mortgage industry will do two times the volume in 2009 as it did in 2008. If this is true, it would mean that we would do approximately $3.6 trillion as an industry. To give you some perspective, in 2003 (the mother of all years) total loan volume amounted to $3.8 trillion. The significant differences between 2003 and 2009 are that only one third of the lenders are still in business, the average loan is twice as hard to get through the underwriting process, and investors are still in fear mode.

The Federal Government will continue to force interest rates down so that the vast majority of Americans can refinance out of loans that are resetting. Additionally, it is my belief that the Federal Government will soon be stepping in to partially insure jumbo loans so that many Americans, who are locked out of a refinancing, will be able to take advantage of these historically low rates. Stay tuned…

Ryan Ogata
Senior Mortgage Consultant