tapering its bond purchasing program
by $10bn per month, mortgage interest rates are sure to go up. While many originators felt the timing on the taper was bad, others stressed that the reduction in the Fed’s quantitative easing program wasn’t the end of the world.
“I think this is not the time to do it, because it’s going to raise interest rates, and if you couple that with the announcement by the FHFA about loan level adjustments, you’re eroding the market for consumers at the worst possible time,” said West Virginia broker Marc Savitt, president of the National Association of Independent Housing Professionals.
Meanwhile, Kevin Laffey, branch manager for InLanta Mortgage, said he felt purchase business would probably weather the higher rates.
“I think from a market point of view, it’s probably going to affect the refi business more than anything,” Laffey said. “As long as they don’t get too crazy about it, I think the (purchase) market is already factored that in.”
Jon Marcoline, branch manager for FBC Mortgage, also recommended focusing on purchase business as rates go up.
“Does it take a moment to recover from the shock?” Marcoline said. “Of course it does. But all you can do is keep pushing forward.”
Laffey admitted that the taper – combined with new “qualified mortgage” regulations set to take effect next month – would present a challenge. But, he said, it wasn’t necessarily an insurmountable one.
“(The taper) and QM
and all that’s going on – sure, it’ll affect us in some fashion, but I’m not ready to make any decisions based on a fear of either one of those,” Laffey said. “We’ll work around it. It may force some of the weaker players out of the game, which may be good. It’ll get some people who weren’t fully committed to exit the market.”
With the Federal Reserve announcing today that it’s