The Key to Reducing Post-Refi Boom Borrower Churn

In this webinar, PRMG Chief Lending Officer Kevin Peranio will help attendees sort through the right technologies as he shares the tech investments that have had the biggest impact on his business.

RealTrending: eXp’s Glenn Sanford reveals what’s next for company

CEO of eXp World holdings addresses his critics about his agent referral program, where he is taking the company next and growth limiters for the brokerage.

Navigating Closing Struggles in 2021’s Purchase Market

Join this webinar to discover the most current information on hybrid and full eNote eClosings and discuss key criteria to successfully implementing your eClosing strategy.

Mortgage servicers take steps to support borrowers amid COVID

Call volumes have spiked to a level not seen since last April, lenders and servicers need to prepare for a significant increase in their workload as they help borrowers through difficult times.

Mortgage

Mortgage applications fall amid unemployment surge

Applications decrease 17.9% from previous week

After a surge in mortgage applications just a few weeks ago, the mortgage business saw continued turbulence last week, according to new data from the Mortgage Bankers Association.

Applications reached an almost 11-year high in early March, as borrowers raced to take advantage of record-low interest rates. Then applications fell for two straight weeks, before bouncing back in the week ending March 27. Yet applications fell again in the week ending April 3, according to data released Wednesday from MBA.

The Market Composite Index, a measure of mortgage loan application volume, decreased 17.9% on a seasonally adjusted basis from one week earlier, MBA said. On an unadjusted basis, the Index decreased 18% compared with the previous week.

The drop in mortgage applications comes on the heels of jobless claims doubling to 6.65 million people in the latest report released last Thursday, coupled with lenders tightening their underwriting standards.

“Mortgage applications fell last week, as economic weakness and the surge in unemployment continues to weigh heavily on the housing market. Purchase activity declined again, with the index dropping to its lowest level since 2015 and now down 33 percent compared to a year ago,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

“With much less liquidity and tighter credit in the jumbo market, average loan sizes declined, and mortgage rates for jumbo loans increased to a high last seen in January.”

Even refinance applications, which had driven an increase in application numbers in the week before, dropped. The Refinance Index decreased 19% from the previous week but was still 144% higher than the same week a year ago, according to the MBA.

The refinance share of mortgage activity decreased to 74.2% for the week ending April 3 versus 75.9% from the prior week. The adjustable-rate mortgage (ARM) share of activity increased to 3.3% of total applications.

“Given the ongoing rate volatility, along with the persistent lack of liquidity in certain sectors of the MBS market, we expect to see continued weekly swings in refinance activity,” Kan said.

On a state level, purchase applications were down both week-over-week and year-over-year in California, New York and Washington. For the week ending April 3, applications in Washington fell 59.9% on a non-seasonally adjusted basis compared to last year, MBA said.

Here are more details of this week’s mortgage application data:

  • The Federal Housing Administration’s share of total applications increased to 10.6% from 9.1% in the previous week.
  • The Department of Veterans Affairs’ share of applications rose to 14.3% from 12.5% the week before.
  • The Department of Agriculture’s share of total applications remained steady at 0.4% from the previous two weeks.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) rose to 3.49% from 3.47% the week before.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.87% from 3.84%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.54% from the week prior’s 3.57%.
  • The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.04% from 3.05%.
  • The average contract interest rate for 5/1 ARMs rose to 3.39% from the previous week’s 3.35%.

Most Popular Articles

Millions will enter housing market in 2021: Zillow

Up to 2.5 million households could enter the housing market in 2021, per Zillow. The buyers will descend on the “secondary cities” across the U.S.

Apr 07, 2021 By

Latest Articles

Ginnie Mae loans lead drop in forbearance to 4.66%

April started off strong for servicers’ forbearance portfolios as the total number of loans in forbearance fell a whopping 24 basis points, the MBA said.

Apr 12, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please