"Reviving the Economy"-Low Interest Loan Boom
Friday, April 24, 2009SUSIE GHARIB: If you walked into a Wells Fargo mortgage processing office at the height of the real estate boom, you would have seen a frenzy of activity trying to keep up with an avalanche of paperwork. Ironically, if you walk into a Wells Fargo mortgage processing office today, you'll see that same frenzy of activity. But as we continue our series: "Reviving the Economy," Diane Eastabrook says the real estate bust has generated a different kind of boom.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: At this mortgage processing center near Chicago, Wells Fargo workers are operating in maximum overdrive. They sift through piles of paper, electronically submit customer data at warp speed and nag loan applicants for information. Angela Gordon says she barely gets a break.
ANGELA GORDON, LOAN PROCESSOR, WELLS FARGO HOME MORTGAGE: Walk away from my desk, you know, go outside, breathe a little bit, come back in and begin the process all over again.
EASTABROOK: With rates below 5 percent, their lowest levels since the Eisenhower administration, Wells Fargo home mortgage has watched applications quadruple in the past few months. The company has added staff at its 60 loan processing centers, cramming some workers into conference rooms.
JAMES LINNANE, SR. VP, WELLS FARGO HOME MORTGAGE: The day before Thanksgiving is when the flood gates really opened up and we went from being relatively slow to being crazy busy virtually overnight.
EASTABROOK: Senior Vice President James Linnane estimates four out of five applications are for refinancing -- the rest for new home purchases. But he thinks that ratio could change if more consumers take advantage of the $8,000 tax credit for first-time buyers.
LINNANE: We may be looking at the best first time home buyer opportunity that we have ever seen and so that is starting to resonate with people even though I think there are some questions about the economy.
EASTABROOK: Rising unemployment is one of the biggest questions. Linnane says tougher loan guidelines could make it harder for unemployed consumers to buy or refinance.
LINNANE: We're back to our old fashioned rules of underwriting. We look at all of the documentation and we're making sure that every borrower can afford not only the payment that they are in, but the payment that they are going to be in.
EASTABROOK: Linnane says how long these workers will remain this busy really depends on how long mortgage rates remain this low. Angela Gordon is hopeful it will be awhile.
GORDON: I've never worked this hard my whole life, but I love it.
EASTABROOK: Diane Eastabrook, NIGHTLY BUSINESS REPORT, Downers Grove, Illinois.
