Originators react to taper news

by Ryan Smith18 Dec 2013
With the Federal Reserve announcing today that it’s 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.”


  • by Bayview Mortgage Inc | 12/18/2013 1:27:27 PM

    Rates go up and they go down. When the banks want to bring more business in. they will lower the rates for a few hours. Most banks are sitting on so much cash. they don't need fannie and freddie

  • by John C Durham | 12/18/2013 2:01:05 PM

    Even stories about "money" aren't about money. 

While Franklin cautioned against "too little money" we are fearful of "too much money". http://ellenbrown.com/2013/12/07/amend-the-fed-we-need-a-central-bank-that-serves-main-street/

    Free credit is the physical manifestation of Faith. Treasury could print all the money it wanted to print and give away at '0' interest. The proof that giving money to TBTF banks doesn't do anything good or bad, including lead to "Hyper-Inflation", even when we find out the FED has given them $26Trillion since '07. Also, the fact that this exercise only moved a group of figures from one set of books to another has now been proven, ie, there was NO EFFECT anywhere on anything from doing QE!

    Let me tell you the deepest darkest Economic Secret: if every person who WAS already, or COULD BE made to be, more PRODUCTIVE through ABUNDANT FREE money is actually ever given that money for productive purposes, a greatly destructive MYTH about money would be gone FOREVER. Money given toward everything truly GOOD FOR human beings, given in amounts LIMITED ONLY by the capacity for borrowers to spend that FREE CREDIT wisely, such an act would double the LIVING STANDARDS in 24 months...again in 72 months...again in 120 months...and so on...and so on...

    Free money put into the hands of GOOD PEOPLE, used only for GOOD PURPOSE creates more value that the GOLD, SILVER, et al, value of money by current financial systems. The only real SECRET is HOW TO DO MORE GOOD with money instead of being so, so dumb as to give one dime to a TBTF BANK.

  • by Greg Cook | 12/18/2013 2:58:39 PM

    Refis are off 60% and new mortgage applications hit their lowest level in 12 years. Maybe there has been an increase in private money investment and the reduced amount is all the market needs?


Should CFPB have more supervision over credit agencies?