MADISON, Wis. (9/20/12)--Some credit unions are seeing more refinancings and even repeat refinancings because of the continuing drop in U.S. mortgage interest rates.
Millions of homeowners who refinanced their mortgages a few years ago when 30-year fixed-rate loans fell below 5% have opted to refinance for a second or third time as rates further decline (dailyherald.com Sept. 14).
Last year, U.S. mortgage bankers provided funds for $1.5 trillion of loans--of which 66% were refinancings. This year another $1.5 trillion in loans are on track to be originated, but refinancings likely will constitute 75% of the total, according to data compiled by National Mortgage News and the Quarterly Data Report (American Banker Sept. 18).
Amoco FCU, a $589 million asset credit union based in Texas City, Texas, is offering a 2.75% interest rate on 10-year mortgages and a 4.75% rate on 30-year mortgages, according to the Texas Credit Union League (LoneStar Leaguer Sept. 17).
The credit union is seeing more members wanting to refinance their current mortgage loans to take advantage of the lower rates, the Texas league said.
During the past couple of years, Denali Alaskan FCU Vice President Jim Picard told the Banker he is seeing a large upswing in multiple refinancing deals in his $484.3 million asset credit union's service area in Anchorage, Alaska.
Achieva CU in Largo, Fla., set a record in August in its mortgage department, said Gary Regoli, president/CEO of the $997 million asset credit union (Tampa Bay Times Sept. 10). The majority of the transactions are refinancings, and the credit union also is seeing good business with second mortgages, Regoli added.
Last week, the refinance share of U.S. mortgage activity rose to 81% of total applications from 80% the prior week, according to the Mortgage Bankers Association (MBA).