Home mortgage refinancing keeps brokers busy

Suddenly, mortgage broker Mark Livingstone is working weekends and spending his meager free time reading resumes because he needs help handling the crush of refinancing applications.

Rates for 30-year mortgages are near their lowest since late 2016, sending many previously hesitant homeowners to their brokers. Under normal circumstances, new-home purchases make up 70 percent of the business at Cornerstone First Financial, Livingstone’s Washington, D.C.-based company. These days, it’s 70 percent refinancing.

“It’s one of the busiest we’ve ever been,” said Livingstone, a 25-year industry veteran who moonlights as a volunteer firefighter. “I almost don’t have the manpower to keep up with it.”

There’s evidence that part of the reason Livingstone and his broker colleagues are so busy is the shrinking of Wall Street’s mortgage units.

Banks let thousands of workers go in recent years, so they have fewer staffers on hand to process refinancing applications.

Now they have to hire workers again, but they’re doing it slowly to avoid having to lay off people soon after adding them. That’s part of the reason why lenders have been slow to cut mortgage rates, even as the Federal Reserve eases the money supply and other borrowing rates across the economy are falling.

“Banks have no reason to slash rates to the bone to bring people through the door,” said Keith Gumbinger, vice president of mortgage-data company HSH.

Even so, at 3.75 percent, 30-year residential-mortgage rates are close to the cheapest they’ve been since November 2016. An estimated 8.2 million borrowers could shave at least 75 basis points from their mortgage rates by refinancing, according to analytics firm Black Knight Inc.

Homeowners have noticed. A Mortgage Bankers Association refinancing index jumped 12 percent in the week that ended Aug. 2, and searches on Google for mortgage refinancing rose 54 percent last week, according to a Wells Fargo & Co. report that suggests the refinance boom will continue over the near term.

Mortgage brokers say they’re up at 2 in the morning counseling borrowers who are agonizing over whether they should refinance now or wait for rates to fall even more.

They may have reason to hold off. Ten-year Treasuries, which tie closely to mortgage rates, have fallen to nearly the lowest levels since the 2016 presidential election as a trade war rages, negative yields proliferate overseas and a series of central bank moves spark concerns about global growth.

“Every day in the last week or 10 days there’s been more bad economic news,” said Mark Goldman, a loan officer at C2 Financial Corp. in San Diego. “How many other shoes are going to drop to push rates down?”