(Update 1) We’re again seeing a mixed picture in mortgage applications this week, taking data on raw application totals and household applications into account. Data from the Mortgage Bankers Association, released Wednesday morning, shows that aggregate application volume rose 11.3 percent on a seasonally adjusted basis for the week ended March 6; most financial news services report this number, so most of you will see today that applications rose as mortgage rates decreased slightly. If only it were so simple. Household applications actually fell, according to Mortgage Maxx LCC, which tracks weekly mortgage applications as well for its proprietary prepayment projections. The MAX index published by the New York-based company fell 5.1 percent last week — so while overall applications appear to have increased, the number of households applying for a mortgage dropped. This suggests that households, either in distress or not, are having a tough time qualifying for a mortgage and are having to shop to get a loan. Anecdotally, we know this is taking place. We know that underwriting criteria are tougher, and that borrowers are having a tough time qualifying for a loan. That distress appears to be even comparatively sharper in California, where a MAX sub-index tracking California application activity found a 8.2 percent drop in household applications last week. “With consumer psyche traumatized, twenty percent of all home owners over the negative equity cliff into the drink, and whole swaths of potential mortgagors unable to qualify, the MAX may have already passed its highs for 2009,” said MAX publisher Paul Descloux in a note to clients. “Each week of currently opaque policies continue to weigh on mortgage application activity as the promise of a four percent mortgage rate proves mythic.” According to the MBA data, refinancing applications surged 13.3 percent, while purchase apps rose 7.1 percent; the refi surge erased a 15 percent drop a week earlier, mostly. Purchase applications remain down what Barlcays Capital analysts called Wednesday a “staggerting” 31.3 percent year-over-year, despite mortgage rates that are 100bps lower than a year ago. Conventional applications rose 5.4 percent, while government apps — mostly FHA — rose a smart 10.4 percent, the MBA said. For more information, visit http://www.mortgagebankers.org and http://www.mortgagemaxx.us. Write to Paul Jackson at [email protected].