Two hugely important paragraphs:
Since the Fed’s Sept. 13 announcement that it would buy $40 billion more securities per month, the rates offered for new 30- year loans have fallen by just 0.13 percentage point, compared with a drop of about 0.7 percentage point for yields on the bonds into which the loans get packaged, according to data compiled by Bloomberg and Bankrate.com. The gap between the two, which typically signals increasing lender revenue when it widens, has reached a record of more than 1.7 percentage point.
Fed Chairman Ben S. Bernanke’s stated goal of helping boost the housing market is being undercut by lenders’ inability to keep up with consumer demand, even as investors drive up bond prices. Banks have been slow to lower rates after being overwhelmed this year by applications to refinance mortgages.
If you have to re-read that several times, do it.
Now, two more paragraphs from page 2 of that same article:
Wells Fargo alone controlled 33.1 percent of the origination market through the first six months of the year, according to newsletter Inside Mortgage Finance. Unlike rivals such as Bank of America Corp. (BAC) and MetLife Inc. that over the past year shrank or closed home-loan units, the bank said it added the equivalent of about 2,000 workers last quarter.
The company recorded gains of about 2.25 percent on mortgages it sold during the period, up from 1.9 percent in 2011’s fourth quarter, according to comments by Chief Financial Officer Timothy J. Sloan on conference calls (WFC). Countrywide Financial Corp., the then-market leader later bought by Bank of America, reported a margin on prime loans of 0.80 percent in 2007, before the industry’s capacity and competition fell.
There are two essential keys then to making QE3 work better and more quickly: Training and jobs in the loan-origination field but also all of the industries associated with housing where trained crafts people and professionals are lacking.