Every week the Mortgage Bankers Association, on Wednesday, reports on the prior week's loan applications. We at Landmark and industry analysts follow it to gauge the flow of applications; investors use it to gauge the future volume of mortgage backed securities.

As it turns out, recent numbers showed that applications to refinance fell for the third straight week as mortgage rates hit new lows. Why could that happen? Don't low rates mean more loans, as borrowers can save money by refinancing?

But many borrowers can't take advantage of these incredibly low mortgage rates due to negative equity, strict underwriting and big bank backlogs. The only thing that can really extend refi activity in a low rate environment is a loosening of underwriting standards to bring more borrowers into the market, something that isn't likely to happen anytime soon.

Twice this year the market did see a surge in refinancing, with the expanded the Home Affordable Refinance Program for borrowers who owe more on their mortgages than their homes are worth and the FHA changing the rules on its streamline refi program for borrowers who already have FHA loans, dropping underwriting almost entirely. Most of the activity in recent months are from the same borrowers who refinanced a year or so ago refinancing again. While programs like HARP and FHA's Streamlined Refi can provide a temporary surge in refis, they still only account for a relatively small share of borrowers.

Recently the Obama Administration renewed its push for a major refinancing program that would involve all loans, but it would need congressional approval, with several proposals under consideration. MBS investors are likely in for a bumpy ride, as Congress will most likely not enact the legislation, canceling any changes to prepayment rates. Yet the market is likely to react to every headline, which suggests significant volatility.

Many of our clients tell our Landmark advisors that they prefer obtaining their mortgage through a smaller shop like Landmark rather than a huge national bank. That is an interesting phenomenon – what is happening out there? After all, aren't the rates and prices all the same?

It turns out, the answer is "no." For smaller lenders, size is critical. They are more nimble. Landmark, for example, prides itself on processing times, quick underwriting, and being able to close loans in a timely manner. Currently some of the large national banks take over a month to close a loan.

The financial crisis stung larger home lenders, and the heightened regulation that followed hasn't done them any favors, either. Mortgage trends have shifted significantly in the past year. In the first quarter, the 25 biggest banks grew mortgage volume by a narrow 2% from a quarter earlier, according to data from the Federal Reserve Board. Mortgages grew 17% at all other banks over the same period. Still, the biggest banks, on average, originate roughly double the volume of all other banks each month.

Returns have something to do with that. While interest rates are low, mortgage returns have risen because such loans have become more attractive to secondary buyers, partly because of stricter underwriting standards following the housing meltdown.

Teams of experienced LO's, processors, and other support staff allow us to find the best rate and price among several companies, and do it efficiently and usually less expensively than a large bank. We pride ourselves on customer service, great pricing, and knowledge of the local markets. It is very hard for a new loan officer in a bank branch to beat that. And borrowers, in turn, are agreeing.