Mortgage Bankers Association has published a new forecast for 2020 total mortgage originations projecting $2.61 trillion. This represents a 20% increase over 2019 originations.
The 20% increase in loan originations include both purchase originations and refinances. Purchase originations are slated to rise to $1.38 trillion, which is an 8.3% jump over 2019. Refinance originations are projected to soar by 36.7% from 2019, totaling approximately $1.23 trillion.
The record low interest rates are given most of the credit for the surge in activity, compounded by the strong economy and the full employment environment. Experts do not believe that this momentum will end abruptly as long as the low-interest-rate environment remains unchanged.
In addition to the record increase in loan originations, the traditional spring home buying season is adding additional demand for loans, especially from new home buyers.
When the average interest rate for a 30-year fixed mortgage fell to a record-low in the prior week, Freddie Mac saw a 224% increase in refinance applications. All of this has created another problem for the loan industry: the concern that the mortgage industry overall will not have enough personnel to handle this recent borrowing uptick in new loan application volume. The shortage of experienced loan officers makes hiring new personnel a difficult challenge. Home buyers and those who seek to refinance their current mortgages can expect to see longer wait times for their loan applications to be processed.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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