Inquiring minds are seeing more evidence of price drops in The (formerly) Golden State as the aggregate mortgage amount will plunge next year to 1996 levels:
Originations will decline to $996 billion in 2011, from a projected total of $1.4 trillion this year, the trade group said today in a statement released during its annual conference in Atlanta. Lending reached a record $3.8 trillion in 2003 as refinancing soared, with new loans remaining elevated over the next few years as home prices and sales boomed.
It is the next paragraph though that should send chills down Californian’s backs:
Rates that are unlikely to go lower even if the Federal Reserve buys more U.S. debt will cause refinancing to dissipate by the second half of next year, Jay Brinkmann, the mortgage group’s chief economist, said. A rush by U.S. homeowners to refinance at near record-low interest rates has marked a rare bright spot for the mortgage industry, under attack for choking the economy with shoddy loans and botched foreclosures.
But make no mistake about who is profiting from these low rates…
“With these interest rates, you cannot be having a bad year in 2010,” Dan Arrigoni, chief executive officer of Minneapolis-based U.S. Bancorp’s mortgage unit, the sixth- largest U.S. home lender, said yesterday during a panel at the conference. “It will probably go down as ranking number one or two for us, both in terms of production and profits.”
Isn’t it nice to know that the bailout money was well used?
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