Mortgage Blog

Got some interestint news recently. Bank stocks
were down recently, Wells Fargo layoff around 4500
mortgage related FTEs(full-time employees) during
the last quarter and bofa laidoff around 3200 loan
related FTEs. And both of them have loan
origination production efll 33% & 38% respectivly.
Also, I heard that bofa, who exited the wholesale market
last year, may consider leave the residential mortgage.

What does that mean to the market? At least those mega
banks believe the loan volume will be down dramatically
this year. In another words, the rate will not go
much lower from here.

At the same time, ARM rate hit history low again during
the last a few days. A few clients asked why?

Though inflation is not a problem, at least lots of
investors thought that long term bonds are riskier
than ever. And if they pull those money to the short
term bonds, it will drive the rates lower.

Will the trend continue? It still depends on the overall
market. If there is no stock crash or correction any time
soon, we may not see much lower rate from here. But the
current lower ARM rate did present a lot of refinance
opportunities.

Why the fixed rates will not go much lower? The investor's
sentiment is one thing. The worry about the future inflation
also holds back investors for the long term bonds.

Overall, we may see lower ARM rates, 2.375% to 2.625% level
rates for 5/1ARM. But for 30 yr fixed, it will be hard to
have below 4.5% 30 yr fixed rates for quite sometime.

But if the rate indeed go lower, for whatever reasons,
we all would be happy. Is not it?