An increased number of mortgage bankers are hired by U.S. banks to meet the high demand for refinancing and home loans. Still, applications cannot be processed in time, undermining the attempts of the Federal Reserve to improve the US economy. In September, the Fed announced that it will purchase $40 billion mortgages monthly. Since then, consumer mortgages have dropped by less and more slowly as compared to usual rates. For example, the home loan rate for 30 years has decreased by 0.18% since September. Specialists are saying that in normal markets rates should fall by almost 0.31%

The current mortgage market is dysfunctional and this is due to the financial crisis and the American housing bust. This means that the new plan proposed by the Fed will be more beneficial for the banks than it will be for consumers in today's society. Banks that are still in the home loan industry are dealing with an increased demand. Still, this business is served by fewer banks because the mortgage crisis wounded and pulverized many important lenders. It seems that everything is working in the favor of the banks. Analysts are saying that the home lending is coming with profit margins that are double than usual. Moreover, the biggest American banks such as Citigroup Inc., Wells Fargo and Co and JPMorgan Chase and Co, have increased their profits in the 3rd quarter thanks to the mortgage operations

It is estimated that in 2012, the home refinancing and purchases will bring the banks $1.47 trillion profits. In 2013, the profits will decline and will only sum up $1.04 trillion. Financial institutions are struggling to avoid over hiring, but the demand is very high. For example, in the 3rd quarter Wells Fargo has hired almost 2,000 individuals. Basically, this is a response to the Fed’s plan and its impact. In addition, Chase features 23% more loan officers and the number might increase

At the same time, mortgage applications are going higher. They have reached 17% of the banks’ operations. Since there is no staff to handle such a strong demand, the banks are not motivated to decrease the rates. William Dudley, the president of the Federal Reserve in New York declared that the home loan business is currently in difficulty. He also said that the economy would be easier to stimulate if mortgage rates were smaller. Mortgage applicants have to deal with wary lenders and tough appraisals, but also with bank staffing issues. The bureaucracy is giving lots of headaches. The 2 – month application process has expanded to 3 months

This entire situation has made the mortgage business more concentrated. The top 2 banks in 2000 were surpassed by JPMorgan Chase and Wells Fargo that are now the biggest mortgage lenders in the United States. This was due to the refinancing boom that has also helped smaller banks. The future of the banks depends on whether or not the mortgage boom is going to continue. Some banks are even cutting down the refinancing applications. However, bank revenues triggered by this situation will be visible in a couple of months