Total mortgage application volume sits 42% above levels seen in the same time last year, according to a weekly survey released today by the Mortgage Bankers Association (MBA). The gain in interest comes even as mortgage lenders tighten underwriting standards, making cheap credit at historic low interest rates more difficult for some borrowers to obtain than ever. The volume of mortgage loan applications submitted in the week ending May 15 showed a week-over-week gain of 2.3%. Applications for refinance mortgages alone rose 4.5%, while applications for purchase loans slipped 4.4% from a weak earlier. Refinance applications accounted for 73.6% of total applications this week, up from 71.9% in the previous week, illustrating the strong overall interest in refinancing. A separate survey that adjusts raw data to count multiple applications from a single household as one entry -- effectively breaking down total mortgage application activity to the total volume of households applying for mortgages -- saw activity decline 1.2% from the previous week ending May 8. This Mortgage Application Index -- or MAX -- indicates that fewer households submitted applications this week, despite the MBA's results that total applications increased. The MAX publisher Paul Descloux, in his weekly commentary on the index, attributes this to the unwinding of credit excesses that causes many lenders to tighten underwriting standards -- and many prospective borrowers to find themselves turned away. A decrease in household activity might indicate reduced optimism on the part of people either looking to buy a home or refinance their current mortgage. And as for the optimistic ones that applied this week, Descloux says, only time will tell. "Though some may be able to refinance, perhaps a quarter of all homeowners now have to deal with negative equity against the backdrop of ballooning unemployment," he writes. Visit www.mbaa.org and www.mortgagemaxx.us for further details. Write to Diana Golobay.