Mortgage application volume fell 7.1 percent on a seasonally-adjusted basis, following a dramatic jump in volume during the week of Thanksgiving, according to data released Wednesday morning by the Mortgage Bankers Association. Purchase loan applications were the primary culprit for the weekly drop, with the MBA reporting a 17.4 percent drop in purchase money applications overall. Government purchase apps — primarily FHA — which had soared in recent weeks, plunged 21.3 percent, as conventional applications fell a lesser 15.5 percent, according to the survey. “Conventional applications reacted more to the recent rates rally than their government counterparts. Over the past two weeks, the refinance application index picked up 300 percent in the conventional sector, compared with a 49 percent increase in the government sector,” according to a research note released by Barclays Capital Wednesday morning. Analysts at the firm cautioned as well that any weekly comparison remains fraught with potential error, given the holiday adjustments impacting last week’s application totals. As has been the case pretty much throughout the current crisis, however, a separate index maintained by Mortgage Maxx LLC actually found that mortgage applications had gained last week, and by no small margin; the MAX, as the index is called, corrects for multiple applications in a single household, and is used by Wall Street researchers as part of prepayment modeling efforts. The MAX registered a whopping 34.9 percent weekly gain, compared the MBA index’s 7.1 percent fall. Both indices tend to be broadly used to predict short-term direction in the U.S mortgage market, although by distinct audiences — the MBA data is used primarily by economic researchers, while Wall Street prepayment researchers have historically relied more so on the MAX for updating their own internal models. MAX publisher Paul Desclooux attributed the jump “the promise of 4.5 percent mortgage rates,” in reference to press leaks in the past week suggesting that the Treasury was readying a plan to intervene in secondary mortgage markets to push primary mortgage rates to a pre-set level, in an effort to stimulate demand. “Who an what will qualify is the devil in the details,” he suggested. The MBA said refinancing applications dominated last week, as rates held relatively in a tight range; refi apps represented 73.7 percent of all applications, the group said. Write to Kelly Curran at [email protected].