New Lending Rules….. The Market is ?????

New Leadership at the Fed….Changes in Origination and Underwriting… Modest Volume with Higher Market Prices…. We enter 2014 with a number of dynamics that point to stable, modestly rising rates and a growing assortment of Mortgage Products.

Some of the impacts may involve BOTH rising Loan Origination costs for borrowers and expanded availability of Non-Prime Lending Products. YES!…as strange as it sounds, we’re “sorta-kinda” seeing the market accommodating BOTH Regulatory and Market Needs. Perhaps that will be a good balance.

Home Buyers and Sellers will confront a 2014 Market with hopes of Strong demand and strong Inventory. Rising Rates have already pinched defined “affordability”….. they also may have an impact on the Pricing Strength for Sellers. The round up of the 2013 Market was that rising rates scared away a some new buyers. The result was a moderation of Volume of Sales WITH Rising Prices. It’s an “Odd Stew”….. Low Volume Markets of all Asset Classes tend to be skittish and poorly defined. That’s that’s best explanation I can offer for the 2013 Market.

“Refinancers” began the year with spectacular low rates that dove to the low 3% range. Speculation about the end of Quantitative Easing drove rates quickly to the mid 4% range. Rates have continued to bobble between lows of 4.125% and Highs of 4.75% throughout the late summer and fall. While next years proposed QM Mortgage rules will pin borrowers against a tougher and more expensive refinance market, there is also talk of further expansion of the Affordable Refinance Programs from Fannie and Freddie. There is growing political will and sentiment to drive the benefit of Low Fed Rates to Existing Conventional Mortgage Borrowers. We have interesting times ahead!

Expertise, Product Availability and Energy to Market will differentiate lending sources in 2014. Many Banks have moved away from Direct Origination. Those that have remained as Direct Originators have gained good expertise and experience with their on-line efforts. They have struggled with their local “point of contact”. The Broker Market has regained a foothold in serving Local Markets, most especially with Home Buyers. The Location, Expertise, Product Offering and Market Energy of Local Mortgage Brokers is powering a resurgence of Mortgage Brokers who offer better market rates and service versus their larger but less nimble competitors

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Eric Raffle
Smart. Fast. Kind.

NMLS 135042
Global Mortgage
755 York Road, Warminster Pa. 18974