In the week leading up to the implementation of the Consumer Financial Protection Bureau’s integrated disclosures, new applications for home loans surged.
A seasonally adjusted 26 percent week-over-week
increase was reported Wednesday in the Market Composite Index for the week ended Oct. 2.
Data for the index is garnered from a survey of 75 percent of all U.S. retail residential loan applications. The base period for the index is March 16, 1990.
The Mortgage Bankers Association, which provided the statistics in its Weekly Mortgage Applications Survey, noted that the jump in activity came ahead of the implementation of the CFPB’s Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure Rule — or TRID.
“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,” MBA Vice President of Research and Economics
Lynn Fisher said in the report.
Applications for purchase financing climbed 27 percent from the week ended Sept. 25 — the biggest increase from the previous week. On an unadjusted basis, purchase applications were 49 percent higher than a year earlier.
Refinance applications were up 24 percent on a seasonally adjusted basis from the last report. The loan size for refinance applications jumped.
“The average loan size of applications in the weekly survey increased by 6.9 percent, driven by a 12.1 percent increase in the average size of refinances,” Fisher said.
Refinance share slipped, however, to 57.4 percent from 58.0 percent seven days prior.
MBA reported that 7.6 percent of all applications were for adjustable-rate mortgages. ARM share increased from
6.9 percent a week earlier.
Applications for loans insured by the Federal Housing Administration
accounted for 12.7 percent of weekly activity, down from 13.8 percent.
The share of applications that were for mortgages guaranteed by the Department of Veterans Affairs fell to 9.2 percent from 10.3 percent.
Interest rates on jumbo mortgages were 10 basis points less than on conforming loans. The jumbo-conforming spread thinned from a negative 12 BPS in the prior report.
