Mortgage rates have been plummeting—they were at just 4.05% last month—and that, combined with Obama administration initiatives, has a lot of homeowners clamoring to refinance. There's just one problem: A lot of homeowners are clamoring to refinance. The financial crisis left fewer banks standing in the mortgage market, and they're struggling to keep up, the Wall Street Journal reports. Banks now take an average 70 days to complete a refinance, twice what it took a year ago.
That's depressing the economic impact of low rates. Usually refinancing "really gets the economy going, and it isn't happening right now," says one industry veteran. Refinancing in the past three years has saved consumers $46 billion, but that's historically low given how far rates have dropped. Some lenders are boosting their rates to drive away applicants. "It really is a rat's maze for the consumer," says one small mortgage lender. Big banks are "taking super-high profit margins." (Read more mortgage rates stories.)