Low interest rates mean boom times for mortgage companies

Lower interest rates keeping mortgage companies busy

David Vindiola of MVM Mortgage Group, 321 Rood Ave., works on refinancing the mortage on an investment property belonging to Alicia Herring of Glenwood Springs.

A run to refinance is going on.

Mortgage interest rates have hit astounding lows three times since mid-December, with rates in the 4 and 5 percent ranges. As a result, some local mortgage professionals are seeing their business triple and quadruple after cutting back in staffing since the recession started to trickle in.

“All of the sudden there’s an influx of loan applications coming in. It’s like a bottleneck,” said Dave Vindiola, co-owner of Monument Valley Mortgage, 321 Rood Ave. “What makes it worse is all these lending companies were running pretty lean, especially some of the bigger companies that let a lot of people go.”

Loan applications are up 16 percent for his business since the end of 2008, Vindiola said.

Vindiola attended a mortgage broker conference in Las Vegas recently with his wife and business partner, Mandy, and learned nearly two-thirds of the 575,000 brokers nationwide in 2006 no longer work in the profession. About 175,000 are left, he said.

Vindiola’s company left two employee positions vacant in the last half of 2008. He is now looking to recruit and train a few more.

He said one of the loan applications he processed about two weeks ago had an interest rate of 4.5 percent. Typical lows, he said, were running at about 4.625 percent and 4.75 percent and lasting anywhere from a few hours to a few days.

“That’s still pretty phenomenal,” he said. “It used to be that maybe we’d get a rate sheet for whatever the day’s rate is lately. Because of the volatility in the marketplace, there may be two, three or four rate sheets in a day. The interest rates are always fluctuating.”

Vindiola said the most prominent lows for interest rates since the last part of 2008 were Dec. 16, 2008, soon after Jan. 1, and at the end of last week.

He attributes the lows to the government stepping in to buy mortgage-backed securities, which again was set to happen this week. He said while lows may continue to happen more predictably through February, there’s no telling what March will bring.

“The rate sheets should get interesting next month,” Vindiola said.

Ken Richards, branch manager for Prospect Mortgage, 2478 Patterson Road, Suite 11, said the combination of variables of credit scores, loan amounts and debt-to-income ratio can change interest rates more often than the time it takes to process the loan.

“This is a good problem to deal with,” Richards said. “For the customer, there’s still plenty of competition so they are getting a great deal.

“We’re having 40- to 45-year lows right now on 30-year rates,” Richards said. “It’s not worth missing this right now to see if these go lower. It’s a good time for people to refinance if it makes sense to them.”


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