Fed Appreciates Increase in Mortgage Processing Capacity
Federal Reserve officials appear to be satisfied with the improvement in the housing market during November and early December in addition to an increase in loan processing capacity that they have been waiting for.
“Capacity restraints on the processing of new home-mortgage applications appear to be easing,” according to the minutes of Dec. 12 meeting the Federal Open Market Committee released Thursday afternoon.
For the past year, Federal Reserve governors and bank presidents have complained about how long it takes lenders to process mortgage applications, which has muted the impact of their policies to increase refinancings and home purchases.
At the Sept. 12-13 FOMC meeting, they commented that “mortgage credit is tight and capacity constraints continue to weigh on mortgage lending.”
But many Fed officials commented at the December meeting that “the headwinds facing the housing market appear to have dissipated somewhat.”
Lenders also have been hiring for the past 10 months to deal with the demand for refinancings.
FOMC members also noticed a change in home sales at their December meeting. “It was noted that the mix of new-home sales seemed to have shifted from homes already completed to homes not yet built,” the Fed minutes say.