According to a Michigan retail loan officer, business is at a “dead halt.” The LO, who has more than 20 years of experience in the sector, said it is sad to see offers vanish with mortgage rates virtually doubling from 2022 onward. Who is currently attempting to get a refi? And people just are not moving? The suffering mortgage market, where loan officers can no longer string together deals as they did during the pandemic, can be seen in the Michigan LO’s struggling business. Rates are solidly in the 6% range due to the Federal Reserve’s desire to fight inflation. Thus, many LOs must work hard to secure business outside their stock market.
The idea behind a mortgage rate lockdown is straightforward: because there are so many American households with low mortgage rates, some will not relocate if rates rise, which locks up the supply of homes, according to Logan Mohtashami, the Lead Analyst at Housing Wire. Because mortgage rates rose so swiftly and stayed steady for so long, it is now risky for people to stay put. Today’s homeowners are in an excellent financial situation by almost any standard. Equity positions are more vital than ever, and credit scores are at record highs.
LOs are searching for unusual situations where people are forced to relocate. While some LOs intend to leave the market or switch to the broker channel in search of higher margins, those who want to continue in the retail sector are expanding their range of loan products such as reverse mortgages, non-QM loans, or obtaining licenses in additional states to reach a larger pool of potential customers. High-time lenders went back to the fundamentals, understood their clients, checked in with homeowners, got referrals the old-fashioned way, and built more relationships. To read more, click here.
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