“Unlike the 66 percent of borrowers Black Knight identified a few months ago, who could have both likely qualified for and had incentive to refinance in the spring of 2015, but for whatever reason didn’t do so, the vast majority of these new candidates did not have such incentive last year,” said Ben Graboske, Black Knight data & analytics executive vice president.
“This has produced a nearly 50 percent increase in the number of borrowers with new-found incentive to refinance, which may well be creating a more pronounced impact on refinance applications and originations as these borrowers rush to take advantage.”
Mortgage applications to refinance have jumped over 100 percent in the past few weeks compared to a year ago, according to the Mortgage Bankers Association. They remain elevated now, as rates have not moved much off their recent lows. The disappointing GDP number last week kept downward pressure on interest rates, meaning there may be yet another surge in refinances.
“We’re working very hard to manage turn times and make a good customer experience, but it’s hard now,” admitted Bryan Sullivan, chief financial officer of loanDepot, one of the largest nonbank lenders.
High volume is actually the reason mortgage rates are not even lower. Lenders say they need to do something to keep up with the volume, and keeping rates slightly higher is the best method.