Mortgage Market Share Report – December 2013

The End of an Era?

The first Refi Boom started in August 1982 when Henry Kaufman of Solomon Brothers, then Wall Street?s most watched guru, publicly announced that the recession had bottomed out. Mortgage interest rates, then at 15 to 18 percent, started falling. I quickly took advantage and refinanced into an 11 ? percent FHA graduated payment mortgage that did not start amortizing until year five. I thought that I had the deal of lifetime.

I now believe that we?re at the end of a thirty year declining interest rate cycle. Mortgage recordings in Monroe County during the fourth quarter certainly don?t contradict that thought. Volume was the lowest since the fourth quarter of 2008. (chart page 9) I?m sure you all remember the craziness back then. It?s quite a difference from the end of 2010, 2011 and 2012 when refinance applications dominated our business.

The purchase market continued modest improvement in 2013. The glass half full take is that there?s still some upside between 2013 and whatever a normal market is. (chart pages 1, 8, 15-18) The new mortgage regulatory environment of the Consumer Financial Protection Bureau notwithstanding, I believe we?ll see more improvement in 2014.

The best news of 2013 is the decline in new foreclosures filed in the Circuit Court. (chart pages 19 & 20) The life cycle of a foreclosure seems to be longer than a year. I expect the number of properties sold at sheriff?s sale to fall as the year goes on.

We are excited to be transitioning to a completely new title and closing production software system during the month of February. The system includes a workflow management component that will help us be even more proactive for our clients!? Team member training will be conducted through early February as we prepare for our go live date, Monday February 17th.

To allow our team members the opportunity to concentrate on working with new system we will be closed to business on Monday February 17th. We will reopen for business February 18th.

John Bethell