The Mortgage Bankers Association's refinance index fell by 28% over the past week, as the refi gravy train came to a screeching halt. The Google Trends search frequency for "mortgage refinance" remains a good indicator of refi activity and is now at the lowest level in years.
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| Google search frequency for "mortgage refinance" |
In response banks are loosening lending standards and laying off employees. Volumes are falling sharply.
Charlotte Business Journal: - Wells Fargo's booming home loan business is slamming the brakes this quarter. Chief Financial Officer Tim Sloan says the San Francisco-based bank expects a 30% drop in mortgage volume in the third quarter. Wells estimates originations this period will dip to about $80 billion from $112 billion in the second quarter.Wells announced that it is cutting 2,300 jobs, Citi 2,200, BofA 2,100, and Chase as many as 19,000 through 2014. There will be more to come.
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