Expert: Lenders Have Refi Concerns

Federal Reserve rate cuts have prompted a surge in refinancing applications but many mortgage lenders are waiting to see the appraisal reports in two or three weeks before counting their chickens. "Business is booming on refis but they are all wondering what the values are going to be. That is the wildcard," said mortgage banking consultant Brian Chappelle. Lenders also are concerned the American consumers are tapped out, he said, and don't have the savings to pay down the mortgage if the appraisal comes in a little low or even cover the closing costs. But researchers at Friedman Billings Ramsey Investment Management insist there are plenty of qualified borrowers that will be able to refinance. And they expect the 2008 refinancing wave will match the wave of 2001. "We expect the current surge in refinancing to persist as long as agency and non-agency mortgage rates remain below the critical thresholds of 6% and 7% respectfully," FBRIM managing director Michael Youngblood said.