Mortgage rates are at record lows, but they could be even lower.
Several reportsrecently have documented why the spreads between mortgage bonds and mortgage rates have widened so much, but few have agreed as to why mortgage rates have not fallen lower, given the Federal Reserve’s latest announcementthat it would buy more agency mortgage backed securities.
The mortgage lending landscape has changed dramatically since the financial meltdown of 2008, with some ramping up volume and others exiting the business. Wells Fargo mortgage origination was up a whopping 72 percent in the first half of this year from the same time a year ago, according to Inside Mortgage Finance. Bank of America originations were down 65 percent. Underwriting is tight, and lenders make no apologies, but mortgage banking profits are also way up, and lenders make no apologies for that either.