Newspaper article THE JOURNAL RECORD

Oklahoma Mortgage Lenders See More Manageable Levels Ahead

Newspaper article THE JOURNAL RECORD

Oklahoma Mortgage Lenders See More Manageable Levels Ahead

Article excerpt

After a year in which commercial and residential mortgage lenders reported near-record levels of business volume, thanks to low interest rates, many are now gearing up for the potential that rising rates could cool the market to a more normal pace of business in the months ahead.

Mortgage bankers say the level of transactions in the loan market should slow down to more manageable levels in the coming year. Interest rates on 30-year fixed-term mortgages, which hit a low of 5.21 percent in June, according to Freddie Mac, have begun to head upward in tandem with rising benchmark Treasury rates.

As recently as the July 31 week, Freddie Mac said the average rate on a 30-year fixed-rate loan was 6.14 percent.

We're seeing an end to, I think, the volumes we've been seeing, said Lynn Tracy, mortgage banker with Bank of Oklahoma. I don't think things are going to slow down tremendously, but I think things are going to be back to the normal level that we would see in the summertime.

By any account, mortgage lending activity in Oklahoma County, as in much of the nation, continued its strong pace in the fiscal year that ended June 30. The number of mortgages certified in Oklahoma County jumped 19.5 percent for the year, said Paula Wells, who processes mortgages for the county.

From July 1, 2002, to June 30, 2003, the county processed 54,158 commercial and residential mortgages, up 19.5 percent from the 45,309 mortgages filed during the same period a year ago. The gain was matched only by the year-ago period, when mortgage filings jumped 25.2 percent between June 2001 and 2002.

It's mind-boggling, Wells said. The amount of business has been outrageous this last year. It seems like everyone in the county has refinanced at least twice in the past year.

Wells said the county does not keep track of what level of business is derived from mortgage refinancing vs. new loan originations. She said, however, that the level of activity appeared to come largely from mortgage refinancing as interest rates continued to drop during the past year.

Beverly Ray, first deputy in the county treasurer's office, said lower interest rates are definitely behind the high level of mortgage filings this year.

A lot of the growth is from a boom in building, she said. But really what has been kicking the numbers up has been the lower interest rates. It's hard to say with these increases in filings how much is from new homes being sold and how much is from refinancing.

Tracy, who handles mortgage lending at Bank of Oklahoma, said she has seen similar gains in refinancing activity.

Of course, the number one thing that has happened here is that the lower interest rates in the first half of the year have caused people to refinance even it they already refinanced or purchased a home this time last year, she said. …

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