A drop in U.S. interest rates may boost mortgage lenders’ second-quarter earnings, but analysts warned that banks won’t profit as much because income from each loan has shrunk due to heightened competition.
If interest rates remain low for a prolonged period, they could boost mortgage lending and profits in the third and fourth quarters.
But in recent interviews analysts said they don’t expect lending activity to eclipse the mortgage banking industry’s landmark 2003 year, when lenders underwrote close to $4 trillion worth of home loans.
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