Raising Mortgage Rates, Dropping Interest?

The latest figures show a sharp dropoff in applications for new mortgages in the quarter ending  March 31st (http://www.bloomberg.com/news/2014-04-14/lending-plunges-to-17-year-low-as-rates-curtail-borrowing.html ). As a builder, rising rates are always bad, and for borrowers the higher rates mean higher costs and payments. But the dropoff in applications might have a silver lining- namely it gives lenders a chance to get re-acquainted with a concept called Customer Service! Since the downturn in 2008, I have heard consistent comments regarding the total lack of customer service on the part of banks especially. The mortgage process, starting with applications and winding through appraisals and approvals, has become a draconian and serpentine (love the animal references!) pathway to purchasing-frustrating professionals and amateurs alike. There are seemingly no rules of common sense any more- the amount of paperwork required has grown exponentially, and the lackadaisical attitudes an the part of some participants is breathtaking. Appraisals, which used to take a week or so, are now assigned by kangaroo court and regularly command weeks of calling, reminders questioning and frustration. Loan committees now ask for the most arcane information about borrowers, leading me to wonder sometimes if you have to donate your brain before taking a banking job. Maybe a slowdown in work will help these people to re-focus on what is the only important relationship they need nourish- that with their customer!!

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