Credit quality is one of them. SMR raised a lot of eyebrows in 1999, when we said a major problem in credit quality might soon develop. Our forecast was slightly premature, but looks right now. Things are getting ugly out there. Thanks, as always, for your interest.
Some local markets are always cold to refis, while others get red hot.
Consider the refi boom of 1998. And therein lies a great opportunity for lender strategy. If you want a servicing portfolio less vulnerable to prepayment, help people buy homes in places where refis seldom occur. If you want to maximize refi production, turn to other places like Ann Arbor, Denver, and Salt Lake City even before California. If you want to do both, use the refi hot spots, but offer specialized products to keep the customer later on.