Mortgage rates are starting to rise as lenders try to stem new applications.
Lenders have been swamped with new applications as low interest rates have led to rising home prices and, more importantly, applications.
Why Slow Apps?
While low interest rates have kept the real estate engine moving during the COVID era, some lenders were already finding the low interest rates untenable.
A couple of large lenders had already capped applications based on loan size, while instead focusing on things like fulfilling PPP (Payroll Protection Program) loans. One large lender we know of stopped fulfilling home loans under two million dollars.
Other lenders stepped forward to fill the gap, but growing numbers of lenders are growing wary of the large number of loans at such low rates.
The Bustling Housing Market
As millions have lost work and thousands of businesses have failed, the housing market has helped to buoy the economy.
The massive drop in rates has led to large gains in home prices in most markets, while refinancing has opened the door for lower payments during a time when many need them.
But, long term forecasts are more uncertain. The last thing the industry wants to see is a market with declining prices as we move forward. And let’s face it, neither do buyers, especially after so many were left under water for so long after the real estate crash of 2007.
How Far Will Rates Rise?
Right now we are seeing rates rise between a quarter and a half a point. But, some analysts see this continuing as lenders try to make loans more profitable, hedging their bets from the low interest rates.
Refinance rates are a little more stable, but higher rates appear to be on the horizon. Business outlets like Fox Business are starting to advise those looking to refinance to do so sooner than later.
Has This Affected Notaries?
In some cases, yes. Between the busy market and some notaries sitting out signings due to the pestilence, there has been a notary squeeze for some.
Online signings have (very) slowly started to creep in, but quickly changing rules, no national standard, and work from home have all complicated the situation.
While work from home has been a blessing for many, large institutions are running into issues with training. In an industry where a single typo on a 40 page doc can wreck a transaction, training employees to exacting standards in all 50 states is onerous.
Especially when you are training tens of thousands of them.
If we’ve learned anything in the last year it is to expect the unexpected. Notary demand will remain strong, though.
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