All of this was supposed to be a thing of the past. You know, no mortgage brokers stringing their customers along while they waited for rates to get better and pad their bottom line, everyone getting exactly what they were promised a new, kinder and gentler mortgage market.
Guess what. It didn’t happen. When rates kicked up suddenly this week a lot of homeowners who had refinance applications in process discovered that it might not even pay them to go ahead with the transaction. Whether they failed to lock their rates out of greed (hoping for even lower rates) or got talked into letting things float by some slick salesman who was looking to make an extra dime or two on the backend the uptick rendered a lot of the rationale moot. They just weren’t saving enough money to justify the expense.
A blog called Field Check Group has done a good if sometimes a little bit too hyped job of reporting the carnage. One interesting tidbit on their blog is that the loan officers are now pushing 3/1 and 5/1 interest only ARMs as an alternative to a 30 year fixed rate loan.
Yikes! Have we learned nothing?