Florida Mortgage And Real Estate: If I Only Had A Crystal Ball…
By: Jim Eggers
FLORIDA — March. 03 (FreeRateUpdate.com) – This morning I was reading the just released Mortgage Bankers Application Index, now called “The Weekly Mortgage Applications Survey.” Whatever, it’s “The Market Composite Index” that measures the mortgage loan application volume for the previous week across the nation. It tells us Mortgage Professionals and the Real Estate Experts what borrowers are applying for. Are they purchasing or refinancing? Are people trying to get money, or are they laying low? Not always, but usually – this index will mirror what’s going on in the great state of Florida. Well, this week “The Mortgage Bankers Application Index” stated that refinancing is on the rise. The Mortgage Bankers Association (MBA) today said that refinance applications were up last week 17.2 percent from the previous week. That’s a lot! It got me thinking about this article I read earlier this year.
First, let me set the stage. At the beginning of each and every year, all the experts come out with their own predictions about what will happen in the Real Estate and Mortgage markets for the up and coming year. And, as I read them I always seem to covet their Crystal Ball. Well, this one particular article by Luke Mullins caught my eye. It had some weight to it because big players from Moody’s and Trulia were looking into the future. I then actually wrote an article about that article and posted it on my blog at JimEggersOnline.com. In my article, I zero in on the hundreds of billions of dollars in option (adjustable rate) mortgages that are set to recast this year! Option adjustable rate mortgages allow borrowers to make lower monthly payments for an initial period, after which the payments adjust–or “recast”–higher. For some borrowers, the new payments can be more than twice their initial payments. It’s this group of borrowers that are now faced with having to do something! Refinance? Do you see where I’m going with this?
A 17.2 percent jump is a pretty high spike and I’m wondering if this is the beginning of people waking up to the fact that they have to do something NOW. Here in Southwest Florida, I’ve noticed an increase of people coming to us – my company J. Eggers & Associates because they can’t qualify for a traditional mortgage. They have tried to refinance, but for varies reasons the banks are telling them no. As some of you may know… our “Stock Loans” allow someone to use their investments (stocks, bonds and mutual funds) as collateral and get below market fixed rate financing. This is an OUT for many people stuck in a “Must Refinance” situation.
So anyway, after reading today’s Refinance Index… it left me pondering – if I only had a crystal ball. That’s this weeks Mortgage Talk!