Mortgage applications drop 10%: MBA
Mortgage applications dropped 10.5% for the week ending Oct. 15 after increasing for the first time in more than a month last week, according to the Mortgage Bankers Association weekly survey. The refinance index dropped 11.2%, and seasonally adjusted purchase index fell 6.7% as well. The four-week moving average for the seasonally adjusted market index did increase 0.4% but fell 1.1% for the four-week purchase index. Refinance activity dropped 82.4% of total applications from 83.1% last week. The MBA also surveys mortgage rate. The average interest rate on a 30-year fixed-rate mortgage increased for the week to 4.34% with 0.81 point from 4.21%. It's the first increase in the rate in six weeks. The average rate on a 15-year FRM increased to 3.74% at 1 point from 3.62% the week before. It too is the first increase in six weeks. The Mortgage Maxx weekly application index increased 9% for the same week, but suggested recent foreclosure problems will put downward pressure on applications. "Given the 2.5 million homes ended up in REO since ’05 and another 6.5 million are moving in that direction, a not insignificant nine million homes may soon be caught in limbo," according to the Maxx. "Title companies will be the best line of defense for new owners of purchase foreclosed properties but reverse engineering this might be a bureaucratic nightmare insuring heavy collateral damage." Write to Jon Prior.