Lenders forced to add staff in response to refinancing boom

Mortgage lenders are under pressure recently, as mortgage rates continue to drop to historic lows and homeowners are applying in large numbers to refinance their current mortgage. Many mortgage lenders had to lay off staff when the recession set in, and were compensating for the lack of manpower by contracting temporary staff to fill in the gaps.

But with so many borrowers looking to take advantage of the low rates, many mortgage lenders are becoming overwhelmed with applications and are looking to hire more staff. In an interview with Bloomberg, Mark Zandi, chief economist at Moody's Analytics, said lenders have been slow to respond to applications because they are understaffed.

"With the consolidation of the mortgage-lending industry during the housing bust, there is a lack of capacity to meet a surge in refinancing," Zandi told the source.

Betty Graham, senior vice president of operations at Frisco Lender Services LLC, told the news source that it typically takes underwriters, insurance companies and appraisers five days to turn around an appraisal. But with the new valuation requirements and understaffed firms, the process can take 14 days or longer in many parts of the country.

Doug Winter, vice president and regional manager for WinTrust Mortgage, told the Minneapolis Star Tribune he plans to increase his staff by 20 percent in response to refinance application growth as well as an investment in obtaining more market share.

"The refi business, it's robust, and the purchase business has been very stable," Winter told the paper.  

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