Record Low Mortgage Rates Should Be Even Lower Analysts Say

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There was an interesting article in the New York Times DealBook section on banks offering mortgage rates higher than where they should be. We have all seen the headlines of record low mortgage rates and refinance rates week after week. Conforming mortgage rates and jumbo mortgage rates are all just above record lows today.

In the NYT's article "With Rates Low, Banks Increase Mortgage Profit" 30 year rates should be around 3.05 percent instead of 3.55 percent if banks were satisfied with the profits they made just a few years ago on underwriting mortgage loans. Current mortgage rates on 30 year conforming mortgage loans are averaging 3.61 percent in Bankrate's national mortgage rate survey.
Loan Type
Purchase    Refinance
Location
State/City    Zip Code
Loan Amt Points FICO % Down
  
$
in 06101, 0, 740    Sort by:
Lender
APR
Rate
Cost & Fees
Notes
 
PERIOD_FIXED_30YEARS Mortgage Loan from Quicken Loans NMLS #3030
Quicken Loans NMLS #3030
https:https://mortgagerates.icanbuy.com/images/lenderslogos/111724.gif
300000
Purchase
4.500%
4.500%
USD
Quicken Loans NMLS #3030 Logo
NMLS # 3030
08/23/2019
at 0.000 pts
45 day lock rate
Est payment: $1,521
Fees in APR: None
The Better Business Bureau gives Quicken Loans and A+ for customer service.
 
PERIOD_FIXED_30YEARS Mortgage Loan from AimLoan.com
AimLoan.com
https:https://mortgagerates.icanbuy.com/images/lenderslogos/112335.gif
300000
Purchase
3.750%
3.750%
USD
AimLoan.com Logo
NMLS # 2890
State Lic # 13256
08/23/2019
at -0.250 pts
30 day lock rate
Est payment: $1,390
Fees in APR: ($663)
Internet direct lender since 1998. View rates & fees, apply/lock online 24/7
 
PERIOD_FIXED_30YEARS Mortgage Loan from Quicken Loans NMLS #3030
Quicken Loans NMLS #3030
https:https://mortgagerates.icanbuy.com/images/lenderslogos/111724.gif
300000
Purchase
4.500%
4.500%
USD
Quicken Loans NMLS #3030 Logo
NMLS # 3030
08/23/2019
at 0.000 pts
45 day lock rate
Est payment: $1,521
Fees in APR: None
The Better Business Bureau gives Quicken Loans and A+ for customer service.
 

Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click here for more information on rates and product details.






Mortgage loan providers acknowledge that they are making a ton of money right now from mortgage loans. They also say they can't afford to lower mortgage rates even more because of the higher expenses resulting from stiffer regulations.

This answer isn't a surprise since industry always blames government regulation on higher prices. Well maybe if lenders didn't offer no doc loans and sub-prime loans during the housing bubble, marking those loans as investment grade and selling high risk bad loans to investors.

Investors including the government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae. Saddling the GSEs with billions of dollars in loses to the point they needed a bailout from the government. Now both Fannie and Freddie are reporting strong profits on these stricter regulations.

While the big banks might not be offering 30 year loans as low as 3.00 percent there are lenders that are. Searching 30 year mortgage rates today on our rate lists there are two lenders offering 30 year conforming rates as low as 3.13 percent. Aimloan.com and Amerisave are both offering rates where they should be according to analysts in the NY Times article.
 
Author: Brian McKay
August 12th, 2012