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Mortgage applications tumble more than 25% due to TRID

Prior week stole much of the volume

Mortgage applications tumbled 27.6% from last week, obliterating the prior week’s drastic jump in applications due to the implementation of the new TILA-RESPA integrated disclosure rule, according to the latest Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Oct. 9, 2015.

The Market Composite Index, a measure of mortgage loan application volume, decreased 27.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 27% compared with the previous week.

In comparison, last week, mortgage applications increased 25.5% from the prior week. Read all about TRID here.

“Application volume plummeted last week in the wake of the implementation of the new TILA-RESPA integrated disclosures, which caused lenders to significantly revamp their business processes, and as a result dramatically slowed the pace of activity,” said Mike Fratantoni, MBA’s chief economist.

“The prior week’s results evidently pulled forward much of the volume that would have more naturally taken place into this week. Purchase volume for the week was below last year’s pace, the first year over year decrease since February 2015, while refinance volume dropped sharply even with little change in mortgage rates,” Fratantoni continued.  

The refinance index decreased 23% from the previous week, while the seasonally adjusted purchase index decreased 34% from one week earlier. The unadjusted purchase index decreased 34% compared with the previous week and was 1% lower than the same week one year ago.

The refinance share of mortgage activity increased to 61.2% of total applications from 57.4% the previous week. The adjustable-rate mortgage share of activity decreased to 7.5% of total applications.

Furthermore, the Federal Housing Administration share of total applications decreased to 12.6% from 12.7% the week prior. The Veterans Affairs share of total applications increased to 11.5% from 9.2% the week prior. The Department of Agriculture share of total applications decreased to 0.5% from 0.7% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 3.99%.

Similarly, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) also remained unchanged at 3.89%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.82% from 3.8%.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.2% from 3.24%, while the average contract interest rate for 5/1 ARMs increased to 3% from 2.96%. 

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