Low interest rates create rush to refinance Hawaii homes - Pacific Business News (Honolulu):

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The drop in rates, combined with a sluggish real estate now means that up to 90 percentf of business for local title and escrows companies is coming from refinancings and not home The trend toward refinancing started in Januaryand February, when interesrt rates began to drop. after a slow start in March, activituy began to surge around midmonthy whenlenders — includin g local banks such as , , and dropped the rate for a 30-year fixed-rate mortgag to as low as 4.25 “Our volume has tripled in the last two weeks,” said Davixd Pietsch, president of Title Guaranty, Hawaii’s largest title and escrowq company. Title and Escrow of Hawaik Inc.
saw a 50 percenft increase in business during the second half of said state PresidentMatt Fortier. “We actuallty were busy in December and January and into the firsy partof February; then it kind of fell he said. “It was pretty much right in line with the trenf in the rates ofthe 30-year Nationally, refinancing has become so hot that the said last monthj that it expects mortgagw originations to hit almost $2.
8 trillionh this year, which would make 2009 the fourth-highest year for loan The other record-high years — 2002, 2003 and 2005 saw high numbers of subprimd and jumbo loans, the association The loans in 2009 will be more with most being Fannie Mae and Freddie Mac-eligiblew loans, or eligible for FHA insurance, the associationh said. But that also means homeowners must have good credit full documentation and equity in their homes to qualify forthe “A lot of people are putting in theid applications in hopes they’ll get the said Harry Kanehailua, vice president and title operationsa manager at Old Republic Title Escrow of Hawaii.
“Wer also see the and the ratio is notthat high.” Another differenc in 2009 is that the tougher standards combined with the higher volume that is puttingt stress on lender processors and underwriters, appraiserd and title companies — are causingt mortgage refinances to take between 45 and 60 days to “A year ago it was like within 30 said Kanehailua, who said Old Republic expected this week to have the highes t number of closings so far for 2009. Pietsch said most of the loanz that have gone througbh escrow at Title Guaranty were taking cash out to payoff high-interest credit card debt.
“I’m surprised that most refinancre transactions are to take cash out and not to reduce theirdmonthly payments,” he said.