Some lenders expect low 30-year fixed rates to trigger a refinancing boom, and the potential seems particularly strong in the Northeast and the Mountain states.

Lenders in these areas are ripe for a new wave of refinancing because of the many mortgages outstanding there, adjustable and fixed, with high rates, according to data from Mortgage Information Corp., San Francisco.

Rhode Island is particularly ripe; more than 16% of adjustables originated there last year carry rates of 9% or more.

Lenders are already starting to see some action, especially in the Northeast, but it may just be the beginning. "We've seen a dramatic increase in refinancing activity in the last six months," said Jim Hackett, vice president of Cranston, R.I.-based Residential Mortgage Corp.

Twenty-three percent of July's origination volume was refinancing, according to the Federal Home Loan Mortgage Corp. "And it's been moving up since then," says Mark Zandi, chief economist with Regional Financial Associates. "The last time it was this high was May of 1994, when it was going in the other direction."

Mr. Zandi predicts that the refinancing share may reach a third of the market before rates turn around.

Some of these Northeast borrowers are making up for opportunities missed the last time rates were low, Mr. Zandi said. "Falling home prices locked some people out of the refinancing boom of 1993," he said. "Now that housing prices have increased, it's making it easier for them to refinance."

But Ian Wong, marketing manager for Mortgage Information Corp., offered a different explanation for the concentration of high-rate mortgages in the Northeast.

"There's just not the same level of competition (among mortgage bankers) in the Northeast as there is in other areas," he said. "In California people can jump from mortgage banker to mortgage banker without points or penalties."

In the Mountain regions refinancing is spotty, despite improved rates.

The business "is just starting to trickle in," said Gail Good, a loan officer at West One Financial Services in Boise, Idaho. Right now, customers opting to refinance are entrepreneurs and the self-employed, she said.

Despite high concentrations of high-rate adjustables, some lenders are not expecting the lower rates to mean more refinancing.

"We went through most of that in 1993," said Robert McBride, vice president of Wallick & Volk Inc. in Cheyenne, Wyo. "We just haven't seen a big boom (in refinancing) recently.

"I would suspect that borrowers here are just not as sophisticated as those in the Northeast. They get a loan and just sit on it for a while,"

"I've got people here with an 11% rate, and they still don't want to refinance," Mr. McBride said. "And I can't tell you why."

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