Banks Fire Up Their Mortgage Machine for a Refinancing Boom

Daily Herald (Arlington Heights, IL), September 1, 2019 | Go to article overview

Banks Fire Up Their Mortgage Machine for a Refinancing Boom


Byline: Hannah Levitt and Claire Boston Bloomberg

Lenders thought it was time to shrink their mortgage businesses. Now they're finding they were wrong.

With rates for home loans sinking to their lowest levels since late 2016, Wells Fargo, the biggest mortgage lender in the U.S., has boosted staffing for the business by about 10% this year and plans to keep hiring. Bank of America is hiring in areas including sales, processing, and underwriting.

The mortgage industry has added almost 5,000 employees since March, a 1.5% gain, according to the Bureau of Labor Statistics. It's a stark reversal from a year ago, when the Federal Reserve was hiking interest rates and banks were cutting thousands of jobs.

Employment in the mortgage lending business has been shrinking for more than a decade, thanks first to the housing crunch and then to rising rates. In 2006, there were more than half a million workers in mortgages, compared with about 323,000 in June.

Now demand for the loans is rising high enough and fast enough that lenders seem to be doing something. The volume of applications for refinancing mortgages has more than tripled since December, according to a barometer from the Mortgage Bankers Association.

"It does put stress on the entire industry, whether it's the appraisers, title companies, mortgage companies," said John Schleck, head of centralized and online consumer lending at Bank of America. The bank is taking about 60 days to process applications, up a little more than a week, as it tries to keep up with the rising volume, according to bank spokeswoman Kris Yamamoto.

On Thursday, data from the National Association of Realtors showed contract signings to purchase previously owned U.S. homes fell in July by the most since early 2018, indicating a pause in buyer interest. The index of pending home sales decreased 2.5% from the previous month. The median forecast in Bloomberg's survey called for no change.

Indeed, lenders are adding staff slowly, to avoid having to rapidly lay people off if the market turns, and they're investing in systems to make their employees more productive. Quicken Loans, the nation's biggest nonbank home lender, has been focusing on investing in technology and related jobs all year, according to Chief Executive Officer Jay Farner. …

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Banks Fire Up Their Mortgage Machine for a Refinancing Boom
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