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New Business Improves

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New mortgage business improved this week, with refinances leading the way. The only category to see a decline was the jumbo loan category, and that appears to be the result of a wider jumbo-conforming spread.

Loan originators locked in 6 percent more loans in the U.S. Mortgage Market Index from Optimal Blue and Mortgage Daily for the week ended Feb. 22 than they did in the prior report. But compared to a year earlier, activity was up 71 percent.

Out front during the latest seven-day period were refinance transactions, which increased 9 percent from the week ended Feb. 15 and were 56 percent stronger than the same week last year.

Refinance share was 44.7 percent, a little wider than 43.5 percent in the prior report but more narrow than 47.7 percent in the week ended Feb. 24, 2012. The most recent number consisted of a 34.9 percent rate-term share and a 9.9 percent cashout share.

The next-best category was conventional, with rate locks for conventional loans up 8 percent for the week and 79 percent better than the same week in 2012.

After that were adjustable-rate mortgages, which increased 6 percent from the previous report but fell 5 percent from the same report in the previous year. ARM share dipped below 4.2 percent from 4.2 percent a week earlier. ARMs accounted for 7.5 percent of all activity a year earlier.

Rate locks for purchase financing followed, rising 4 percent from seven days prior and soaring 85 percent from 12 months prior.

About the same number of rate locks were completed for loans insured by the Federal Housing Administration as in the previous report. But FHA activity ascended 44 percent on a year-over-year basis.

FHA share, meanwhile, drifted down to 19.0 percent from 20.1 percent and was 23.9 percent one year previous.

The only category to lose ground in the latest report was the jumbo category, which was off less than 1 percent. But jumbo activity has surged 128 percent from the year-earlier report.

Jumbo share fell to 9.0 percent from 9.6 percent but has fattened from 7.2 percent from the same week in 2012.

Jumbo business diminished as the rate for non-conforming loans climbed to 25 basis points over the conforming rate from a 16-basis-point jumbo-conforming spread. However, the spread has fallen from 50 BPS one year prior.

The conforming, fixed-rate, 30-year mortgage averaged 3.917 percent, slightly worse than the prior week’s 3.902 percent but better than 4.232 percent 12 months earlier.

Fifteen-year pricing improved, with the discount for a shorter-term loan increasing to 82 BPS from the previous report’s 80 BPS and the year-earlier spread of 77 BPS.

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