The housing market has been improving considerably for the last several months. Perhaps the biggest beneficiaries of these developments have been some of the nation's largest mortgage lenders, according to data compiled by Bloomberg News. Both Wells Fargo and JPMorgan Chase, the two largest mortgage lenders in the U.S., are both expected to post profits in the third quarter thanks in large part to the Obama administration's policies designed to improve the nationwide housing market.
Further, both U.S. Bancorp and Bank of America, which themselves are ranked third and fourth in terms of mortgage lending nationwide, will also improve, and it's expected that these four companies alone will post $10.9 billion in profits, the report said. Much of that profit may come from the White House's efforts to encourage more refinancing by existing owners, and also because of lenders' roles as middle men for home loans backed by the government-sponsored enterprises Fannie Mae and Freddie Mac.
"Government policy is encouraging banks to make mortgages, and they want to keep it that way," Nancy Bush, an analyst and contributing editor at the bank research firm SNL Financial LC, told the news agency. "For them, it's sort of a beneficent cycle right now."
In all, the Obama administration's Home Affordable Refinance Program has helped about 900,000 homeowners get more affordable terms on their mortgages since 2009, the report said. Further, data from the Mortgage Bankers Association shows that in just the three months from July to September, consumers refinanced about $305 billion worth of home loans.
Some experts believe that there could be more improvements in the future as well, thanks largely to the Federal Reserve Board's third round of quantitative easing, known as QE3, the report said. This is designed to keep interest rates near their current low levels for at least the next few years.
Record low rates and discount prices could encourage many buyers to enter the housing market once again in the near future, and slowly rising property values might bring more underwater homeowners back to safety as well.
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