The mortage business, rates, and Y2Kgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Noted in a thread in c.s.y2K --
From AmCities Atlanta: As rates rise, refinancers back off, lenders say
...A lot of refinancing and a housing market that has been booming for several years has left the mortgage industry fat with workers. The refinancing market made up a "ton of revenue," McCorvey said, and that money no longer is coming in.
Dire prediction "This holiday season is going to be brutal for a lot of people in the mortgage business," said McCorvey, who expects loan volume for fourth quarter 1999 to be about 60 percent of the previous year. "Last year, you had 100 loan officers doing 100 loans. This year, you have 100 loan officers doing 50 loans."
McCorvey anticipates a "mass exodus" in the mortgage industry to hit toward the end of fourth quarter this year and the beginning of first quarter next year.
Another factor -- fears about the effects of the Y2K problem -- also will affect loans for the fourth quarter, said Patrick Flood, president and CEO of HomeBanc Mortgage Corp. in Atlanta, which is owned by Memphis, Tenn.-based First Tennessee National Corp. (Nasdaq: FTEN).
He expects more people to wait until after the first of the year to buy homes.
Additionally, the employment outlook has a dramatic effect on the housing market. If the Federal Reserve Board moves interest rates upward to stave off inflation, it dampens growth projections by employers, which filters down to slow the purchase of homes, Flood said.
But the employment outlook remains strong, he pointed out, leading him to predict happy days for lenders for some time to come...
-- Mac (email@example.com), August 31, 1999