Tags: mortgage applications | home loan demand | housing | buyers

Mortgage Applications Spike 26 Percent Amid New Rules

Mortgage Applications Spike 26 Percent Amid New Rules
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By    |   Wednesday, 07 October 2015 09:11 AM

Mortgage applications increased 25.5 percent from a week earlier amid lower home loan rates and anxiety over new mortgage regulations, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The Market Composite Index, a measure of mortgage loan application volume, increased 25.5 percent on a seasonally adjusted basis from one week earlier, when they fell 6.7 percent. On an unadjusted basis, the Index increased 26 percent compared with the previous week.

Applications for home purchases jumped 27.4 percent, while applications for refinancing rose 24.2 percent. The average rate for a fixed 30-year mortgage with conforming loan balances ($417,000 or less), meanwhile, fell by 0.09 percentage point to 3.99 percent, the MBA said.

"The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and as many applications were filed prior to the TILA-RESPA regulatory change," said Lynn Fisher, MBA's Vice President of Research and Economics.

The change is part of a move by federal regulators to further protect borrowers by forcing lenders to disclose all details of a loan at least three days prior to closing; it went into effect October 3, CNBC explained.

The program aims to consolidate rules and disclosures in the Truth In Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA), Investors.com explained.

But while it might make things easier for homebuyers, TRID will likely complicate things for mortgage lenders as well as realtors, both of whom have been scrambling to learn new rules and adapt to a new system that covers everything from how closing fees can be imposed to when closing documents must be finalized, Investors.com said.

Stringent mortgage rules stemming from Dodd-Frank legislation have created a regulatory minefield for banks and loan brokers, Bloomberg reported.

This year alone, the Consumer Financial Protection Bureau has handed out more than $260 million in fines for residential-mortgage rule violations. Automated processing of home loans, such as the services offered by Black Knight, gives lenders protection by vetting every action for compliance.

Lending rules that rarely changed before the housing crisis are now in constant flux, said Richard Green, sales manager in the mortgage division of Presidential Bank, in Bethesda, Maryland.

“People outside of the industry think last year’s regulations on qualified mortgages were a sea change for the industry, but they weren’t,” Green said. “TRID is bigger because it’s not just about who gets mortgages, it’s about how the mortgages are made and how lenders do business.”

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Applications for mortgages surged 25 percent last week amid lower 30-year mortgage rates.
mortgage applications, home loan demand, housing, buyers
Wednesday, 07 October 2015 09:11 AM
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