As noted by Richard Shreeve, Mortgage Market Weekly
According to numbers just released by the Mortgage Bankers Association, mortgage application volume decreased 22.8 percent on a seasonally adjusted basis during the week ending December 25.
So, that being said, you might be wondering why I included this in the "Good News" section of the newsletter. The answer is that over my 18 years of mortgage lending experience and numerous real estate market cycles, I have found that when there is such a dramatic decrease in application volume, it has a tendency to push interest rates down, and aids in the ability to expedite applications through the approval/loan closing process compared to typical market turnaround times.
The reason for this is simple; you need to remember that mortgage lenders are in business to make loans (loans = money), when there is a significant down-cycle and therefore a lack of business, investors need to produce business, of course they do this by making the products that they sell (mortgages) more affordable to the market place, i.e. you and me.
On top of this, because of their lack of volume, loan approvals have a tendency to be accelerated through the approval/closing process. Remember to banks and mortgage lenders "time is money".
The lending process (in my experience) works like this: If they (the banks) have an excess of mortgage applications in the submission phase, they have a tendency to think that it is assured 'future money' (ergo, they tend not to be in such a hurry to expedite it through the loan approval and closing process). It may seem strange, but having worked in the past on the banking side of the business (as both a loan underwriter and a as a loan officer), banks have a tendency to think that no one (speaking about mortgage applicants) will simply 'walk away' because of the overwhelming time and seemingly endless conditions that keep being thrown at the borrower in order to close the loan.
But, given lean times (lack of loan applications), banks have a tendency to treat mortgage borrowers, and mortgage brokers working on your behalf, quite differently. Remember, no loan applications = no loan approvals/loan closings = no money. Their shareholders would not be very happy with that outcome.
With interest rates still near historic lows, added to the fact that they will most likely dip somewhat in the near future due to aforementioned information - if you or your clients are thinking about purchasing a home, or may be interested in refinancing now may be the 'window of opportunity' that you were waiting for.
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