Next week the FHA, the government’s mortgage insurer, will institute changes to its refinance program for current FHA borrowers, lowering fees and premiums. That should increase volumes further.
While big banks may be profiting from the refinance surge, some can’t handle the volumes. It can take far longer to refinance at a larger bank than a smaller lender.
“There are major staffing issues, 90-plus days for a refi at the big banks. That’s why middle market banks are doing the majority,” says Craig Strent, CEO of Bethesda, Maryland’s Apex Home Loans, a local direct lender. Wells Fargo, the nation’s largest lender, Strent admits, is the most efficient and has made it clear they want retail mortgage business. Bank of America is far less aggressive.
“Most major banks are getting all the refi business they want, and can handle, at least for now,” notes Guy Cecala. “On the plus side of the surge in refi activity is that it generally improves the quality of mortgages—and servicing—since the new loans are run through tougher underwriting and often have more equity.”
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