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Where's That Refi Boom We Heard About?

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You’d think that with rates on the 30-year fixed falling half a percentage point in just a week that the phones would be ringing of the hook at your neighborhood mortgage broker. Apparently that’s not the case.

We’ve been calling around, from Maryland to Michigan, and we’re finding brokers sitting by the phone instead of tallying new loans. The reasons are many. For one, brokers say a lot of folks just don’t know that the rates are lower now or don’t fully understand the Fannie/Freddie takeover (not that any of us really do).

A lot of people heard that the government is shoring up the two mortgage giants so that they don’t go out of business, but what they might not have heard is that the Treasury, in addition to that, is going to begin buying mortgages on its own, to the tune of $5 billion for a start. That will push rates lower, and it also negates a lot of the fees that Fannie and Freddie were passing on to borrowers during the tough times.

But there are other issues, namely home prices and stricter standards. The big nationwide home price numbers show that as a whole we haven’t given back all of the gains of the housing boom, but we have since 2006, so if you bought your home around then, you probably have very little equity in it.

    • Mortgage Refinancing Jumps as Rates Slip

In some of the boom markets, we have seen the gains fall off farther. Zillow.com estimates that a full one third of Americans who bought their homes post 2003 are underwater on their mortgages, which of course makes refinancing a bit impossible.

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And standards haven’t loosened up. No more are the days of the no documentation, no money down, low-interest loans.

Borrowers need to put some equity down (20% for the good rates) and they have to open up their financial books to lenders for a looksee.

So while there are definitely opportunities out there for some folks to refinance into better rates, the refi boom that many predicted on Monday, hasn’t really materialized, at least not by Thursday.

Questions? Comments? RealtyCheck@cnbc.com