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

Mortgage Applications Jump 11.8 Percent as New Loan Rules Fuel Anxiety

Mortgage Applications Jump 11.8 Percent as New Loan Rules Fuel Anxiety
(Dollar Photo Club)

By    |   Wednesday, 21 October 2015 01:53 PM

Mortgage applications rose nearly 12 percent last week as volatility continues amid new home-loan regulations, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

Last week's results include an adjustment for the Columbus Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 11.8 percent on a seasonally adjusted basis from one week earlier. 

"On an adjusted basis, application volume increased last week, led by a sharp rebound in government volume. We expect that application volume will remain volatile over the next few weeks," Mike Fratantoni, MBA's Chief Economist, said in a statement.

The refinance share of mortgage activity decreased to 59.5 percent of total applications from 61.2 percent the previous week.

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.95 percent, the lowest level since May 2015, from 3.99 percent.  The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.20 percent.

Weekly mortgage applications have been volatile amid the implementation of new mortgage disclosure rules (known as TRID), CNBC reported.

Lenders had to make major changes to their loan processing systems, and the fear was that this would slow applications; borrowers, therefore, rushed to get applications in before the rules went into effect on October 3, CNBC reported.

The TRID 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, 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.

The survey covers over 75% of U.S. retail residential mortgage applications, according to MBA.

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.”


© 2020 Newsmax Finance. All rights reserved.


   
1Like our page
2Share
Personal-Finance
Mortgage applications rose nearly 12 percent last week as volatility continues amid new home-loan regulations,according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
mortgage applications, home loan demand, housing, buyers
485
2015-53-21
Wednesday, 21 October 2015 01:53 PM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved