U.S. Mortgage Applications to Dive 27 Percent because of the New TILA-RESPA Disclosures
By Miho Favela | source: http://www.worldpropertyjournal.com
New TILA-RESPA Disclosures Cause U.S. Mortgage Applications to Dive 27 Percent
According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending October 9, 2015, mortgage applications decreased 27.6 percent from one week earlier.
The Market Composite Index, a measure of mortgage loan application volume, decreased 27.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 27 percent compared with the previous week.
The Refinance Index decreased 23 percent from the previous week. The seasonally adjusted Purchase Index decreased 34 percent from one week earlier. The unadjusted Purchase Index decreased 34 percent compared with the previous week and was 1 percent lower than the same week one year ago.
"Application volume plummeted last week in the wake of the implementation of the new TILA-RESPA integrated disclosures, which caused lenders to significantly revamp their business processes, and as a result dramatically slowed the pace of activity. The prior week's results evidently pulled forward much of the volume that would have more naturally taken place into this week. Purchase volume for the week was below last year's pace, the first year over year decrease since February 2015, while refinance volume dropped sharply even with little change in mortgage rates," said Mike Fratantoni, MBA's Chief Economist.
The refinance share of mortgage activity increased to 61.2 percent of total applications from 57.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.5 percent of total applications.
The FHA share of total applications decreased to 12.6 percent from 12.7 percent the week prior. The VA share of total applications increased to 11.5 percent from 9.2 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.7 percent the week prior. -
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