A drop in mortgage volume has already caused layoffs at major banks, including JPMorgan Chase, and it is now more costly for the banks to make new loans. Origination costs are expected to rise 11 percent this year from a year ago, to nearly $5,900 per loan, according to National Mortgage News.
The higher costs are associated with complicated new requirements from the Consumer Financial Protection Bureau, the FHA, Fannie Mae and Freddie Mac. These take effect in January, but lenders are already working to put the new systems in place.
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Lenders are also dealing with fewer delinquent loans. While mortgage delinquencies did bump up 4.23 percent in September from August, they are down 12.63 percent from a year ago, according to Lender Processing Services. Loans in the foreclosure process are down over 32 percent from a year ago.
—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.
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Article source: http://www.cnbc.com/id/101135162