Mortgage lending is set to shrink 40 percent in 2014 compared to 2012, according to the Mortgage Bankers Association. This follows after last year’s record profits for many lenders, mostly attributed to a refinancing boom. But that refinancing boom appears to be subsiding as refis are set to drop to their slowest pace since 2008.
In 2012, refinancing applications made up about 71 percent of all mortgage applications, but that percentage is expected to drop to 58 percent this year and decline to 32 percent by 2014, according to MBA’s projections.
Many lenders are eyeing real estate professionals as a way to generate more business. Data from Inside Mortgage Finance and Campbell Surveys shows that real estate professionals influence 45 percent of home buyers’ decisions on choosing a bank for home financing.
“We’re past the stage of handing out donuts,” Guy Cecala, publisher of Inside Mortgage Finance, told Bloomberg. “Over the last couple of years most of the major lenders have stepped up their outreach to real estate brokers. They see them as a viable channel for getting more home purchase business.”
For example, Wells Fargo — the nation’s largest mortgage lender and originator of nearly 30 percent of U.S. home loans last year — enlisted the support of former Notre Dame football coach Lou Holtz to draw about 24,000 real estate professionals Thursday to its annual “CineMeeting” event. The event was broadcast in high-definition in 86 movie theaters across the country — showing Holtz, among others, offering inspirational tips to sales associates.
Source: “Wells Fargo Taps Notre Dame’s Holtz to Spur Lending: Mortgages,” Bloomberg