Facebook Twitter Instagram
    Mortgage.info
    • First Time Homebuyer
    • Loan Programs
    • VA Programs
    • Refinancing
    • Beyond the Mortgage
    Mortgage.info
    Home»Mortgage Refinance»Weak Refis Hurt Lenders
    Mortgage Refinance

    Weak Refis Hurt Lenders

    Chris HamlerBy Chris HamlerAugust 13, 2017No Comments2 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr Email
    Share
    Facebook Twitter LinkedIn Pinterest Email

    The rise in interest rates has negatively impacted refinancing applications, driving earnings of regional banks down for the second quarter of the year. According to recent reports forwarded by banks like the US Bancorp and the BB&T, revenues fell significantly by 11 and 15 percent, respectively. It’s a sweeping trend covering even the largest regional banks.

    All dips

    Banking income from mortgagesfell by double digits on a percentage basis for many regional banks. SunTrust Banks from Georgia reported a $63 million decrease in income for the quarter. JPMorgan, PNC Financial Services and Citigroup also reported declines by 33 to 41 percent.

    The previous increase in wages and the strong labor market which allowed the housing sector to recover after the crisis has gradually been undermined by the increase in competition and funding costs, canceling out the gains and bringing down the numbers of refinances as a result, for example.

    This is after the banks have also significantly benefitted from refinances during the early years post-crisis to help many borrowers get out of their common mortgage woes.

    »Click Here to get Matched With a Lender»

    A necessary shift

    On the other hand, it should be noted that mortgage applications are increasing as more first-time homebuyers enter the market, possibly to take advantage of historically-low interest rates.

    But as rates start to rise, with a tumbling pattern that – although dramatically inching up and down in the past few months are still pointing towards an upward trajectory, many of the refinancers in the past few years are slowly rethinking the prospect of a refinance.

    The chief economist of the Mortgage Bankers Association, Mike Fratantoni, said they expect the refi volume to drop by more than 40 percent in 2017 compared to the year prior.

    “With the decline in volume, we are seeing vigorous competition for the loans that are getting done, and profit margins have narrowed for all lenders,” Fratantoni said.

    As the results shift, the lenders are also making a corresponding change in their structure to give a leeway for the future.

    »Click Here to get Matched With a Lender»

    Chris Hamler
    + posts
    • Chris Hamler
      https://mortgage.info/author/chris-hamler/
      Mortgage Programs for First-Time Home Buyers
    • Chris Hamler
      https://mortgage.info/author/chris-hamler/
      So You Have a House Now. What Else Do You Need?
    • Chris Hamler
      https://mortgage.info/author/chris-hamler/
      Should I Cash-Out My Equity to Invest?
    • Chris Hamler
      https://mortgage.info/author/chris-hamler/
      How Will the New Tax Laws Impact Homeownership?
    lenders Mortgage Mortgage Bankers Association mortgage refinance refinance
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Chris Hamler

    Related Posts

    Don’t Overpay for Your Mortgage Refinance: Here’s How to Slash Your Costs and Save Big!

    November 22, 2022

    Pros and Cons of Refinancing in the Current Market

    October 21, 2022

    Alternative Loan Options to a Cash-Out Refinance

    September 23, 2021
    Mortgage.info
    © 2023 Mortgage.info Designed by ThemeSphere.

    Type above and press Enter to search. Press Esc to cancel.