Over the past week the interest rate on certain loans have risen by up to 50 basis points, but the residential finance industry is hardly panicking, at least not yet.
“It's too early to tell how this will affect things,” said Jeff Detwiler, president of Long & Foster. “We've actually seen an increase in business.”
Long & Foster, a Mid-Atlantic realty giant that also owns Prosperity Mortgage, believes rising rates can also spur some customers to lock in their loans and make a decision quicker.
“Today's application volume and yesterday's were actually stronger than a week ago,” said Detwiler. Prosperity, a nonbank, is a $3 billion a year producer.
Tuesday morning the yield on the benchmark 10-year Treasury was at 2.35%, compared to lows of about 1.9% two weeks ago.
One warehouse executive who works for a top-five ranked firm told National Mortgages News that “its way too early” to judge what effect rising rates will have. “Volumes are down,” he added, “but that's seasonal.”
A loan officer for Bank of America, speaking under the condition his name not be published, said, “I'm getting tons of calls daily for both purchases and refinances. And yes loans are closing.”
Brian Benjamin, a loan broker who works the northern New Jersey market, said applications are still coming in, but noted that “some people are on hold. No one is going to close until rates go back down. Particularly affected are FHA Streamlines.”
He explained: “With the jump in rates they no longer meet the FHA 5% guidelines. It was hard enough with the new MIP; now rates are up.”
