Posted by & filed under Stockton Real Estate.

By Mandelman


With evidence of a housing market recovery appearing only in the press, the recent news describing the precipitous drop in mortgage originations and diminished prospects for refinancing are already combining to make the outlook for 2014 quite grim. And a hollow feeling of insecurity is spreading throughout the industry.

We didn’t even make it to the Ides of March, and already the volume of mortgages being originated is at the lowest point in six years… since 2008… and we all remember what a banner year that one was for originating mortgages, right?

Originations are said to be down 60 percent over last year, HARP refinances down 70 percent over the same period… originations are down 13 percent over the past two months alone and I would have to say that’s not at all promising as trend lines go.

Of course, the press-release-based-press is blaming higher interest rates, which I can’t help but think of as being laugh out loud, hysterical. Look, if four percent interest rates are killing your housing market… well, you don’t have much of a housing market.

Other reports are even goofier when placing blame; my personal favorite is “harsh winters.” Never mind that it’s in the Western U.S. that sales have fallen the farthest. And it’s clear that the refinancing boom that’s been going on and off since 2009, with the advent of various federal programs and record low rates, has come to an end.

To juice refinancing again within the confines of current programs, Fed Chair Yellen would have to quantitatively muscle rates down to something close to 2.5 percent, something that is probably just not possible. There is the possibility of HARP 3.0, I suppose, which could extend HARP refinancing to those with loans owned by Fannie Mae and Freddie Mac, and perhaps do away with the need for appraisals, but whether that will come to pass is anyone’s guess.


The obvious reason is that, as rates were forced down by the sheer weight of Bernanke’s Federal Reserve, we refinanced every eligible borrower in the country… two or three times, in many cases, and now the only people left to refi are… wait a minute… there are no people left to refi… or not that many, anyway.

But, do you mean to tell me that no one saw this one coming? The only thing I can think of that would …read more

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