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Mortgage Applications Surge on Falling Rates

December 22, 2008
Eve Whitaker

Eve Whitaker

Submitted by Eve Whitaker, REALTOR.

Bankers are seeing a wave of mortgage-loan applications triggered by falling interest rates, and are reassigning scores of workers to handle the crush of would-be borrowers.

A large percentage of the applications are for refinancings rather than purchases, and the phenomenon is so new it isn’t yet clear how many of the borrowers will actually receive loans. But some bankers say it could be the beginnings of a possible turning point in a battered lending sector and a still-weak housing market.

Borrowers “are starting to say, ‘Wow, I can get this piece of property at this price, which is a fair amount lower than I could have gotten a year ago,”‘ said Todd Chamberlain, head of the residential mortgage division at Birmingham, Ala.-based Regions Financial Corp.

The nation’s largest mortgage provider, Bank of America Corp., is among the most optimistic. Chief Executive Kenneth Lewis has predicted that housing prices will stabilize by mid-2009. The Charlotte, N.C., bank recently told 300 loan processors in Richmond, Va., and Tampa, Fla., to switch from home-equity loans to mortgages starting Monday. Mortgage applications nearly doubled through the first half of December as compared to the same period in November, said Bank of America spokesman Dan Frahm.

For the entire article on the Wall Street Journal, please click here.

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