Plunging Mortgage Rates Have Lenders Hopping, But Not Celebrating

As mortgage rates plunge below 5 percent mortgage lenders are being flooded with consumer inquiries about mortgage refinance.

But, don't expect big waves of hiring and refinance boom parties. This time around loan officers and mortgage businesses are playing it safe and working harder with less.

The average loan officer now has his stacks of new files where an empty desk and silent phone once stood. The new business is being fueled by past clients and new customers looking for the new, and almost daily dropping mortgage rates.

Although, mortgage rates have been descending steadily for some time, the recent Federal buying of mortgage-backed securities has kicked the market in, on the resulting lower rates.

You might expect that this would help a little with unemployment. Are out of work loan officers coming back to work? No, is the answer of most mortgage lenders. They are doing more with less and being cautious about the future.

Lenders are also aware that approvals for all of this refinance applications are still hit or miss. Credit standards are and continue to tighten. This means the frantic activity is not necessarily resulting in healthy profits that come from approvals. Still, most mortgage brokers and lenders are becoming more optimistic with the government's continued support and assurance to the mortgage market.