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70 Precent Of Lenders To Be Gone By End Of 2015
"70% of Mortgage Lenders to be gone within a couple of years" - Dr. Ted C. JonesChief Economist at Stewart Title (Dr. Ted C. Jones) made a bold prediction in Boise Idaho, on Feb 20th 2014. Within a couple of years, there will likely be 70% less mortgage lenders in the business according to Ted.
The reason being attributed to a ton of new regulations effecting this mortgage industry and the lack of the refinance business. As you likely know there was a huge boom in the refinance market over the last few years.
The record low interest rates and the government sponsored programs allowing people to refinance even if they had zero or negative equity created a monster boom in the refinance market, which causes mortgage companies all around the nation to swell in size. Now as interest rates are going up and predicted to continue to rise, the desire for homeowners to refinance is extremely low and will be for the foreseeable future according to Dr. Jones.
New restrictions on lenders and lack of refinances is poised to really shake up on the mortgage lending industry. No doubt any loan officer hearing these words yesterday in Boise turned a shade whiter.
Personally, I feel 70% is an overly inflated prediction. The reason: Many mortgage companies will adapt or new ones will sprout up to meet the market demands. Home Loans are still a big business, so expect to still see a lot competition to get your home loan.
However, I do expect there will be a lot of upcoming layoffs within mortgage companies, and large companies will try to gobble up other companies struggling in the new lending environment to gain more market share.
As for real estate agents and consumers are concerned, it will be important to pay attention to which mortgage companies are adapting to these new conditions and which ones are still hanging on to the past. Don't be surprised if your favorite lender contact switches companies once or twice in the next year or two.
- Mike Turner - Boise Realtor
Trivia about Mike: Prior to working in real estate, Mike worked for few years on movies and TV shows around the world as a Camera Boat Operator and Marine Logistics Coordinator, including the TV serie....
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