Mortgage Bankers Association

Application Volume Rose in Wake of Bank Turmoil, Falling Rates

Mortgage application volume increased for a second straight week as investors fled to the safety of government-guaranteed securities in the wake of three bank failures, and fears of depositor runs on several large regional banks. The Mortgage Bankers Association (MBA) said its Market Composite Index, a gauge of loan application volume, rose 6.3 percent on a seasonally adjusted basis during the week ended March 10. The index was 7 percent higher before adjustment. Joel Kan, MBA’s Vice President and Deputy Chief Economist said, “Treasury yields declined late last week, as market concerns over bank closures and the potential for broader ripple effects triggered a flight to safety in Treasury bonds. This decline pushed mortgage rates for all loan types lower, with the 30-year fixed rate decreasing to 6.71 percent, Home-purchase applications increased for the second straight week but remained almost 40 percent below last year’s pace. While lower rates should buoy housing demand, the financial market volatility may cause buyers to pause their decisions.” [purchaseappschart] The Refinance Index increased 5 percent from the previous week but was 74 percent lower than the same week one year ago.  The refinance share of total applications decreased to 28.2 percent s from 28.9 percent the previous week. [refiappschart] Kan noted that, while refinance activity was still well below that of a year earlier when it held a 48 percent market share, and rates are still more than 2 points higher, the dip did bring some borrowers back, as evidenced by the 5 percent increase in refinance applications last week.

DPA, Subservicing, Loss Mit, Fee Collection Tools; Banking… This is Not 2008; STRATMOR on Customer Experience

The Ides of March… And college basketball time. Here in Kentucky (men #6 in the East, Louisville women’s team #5) I overheard someone on the phone. “Yesterday I saw a woman in Walmart with March Madness teeth. She was down to her final four.” March Madness is in full swing, whether it is hoops or bonds. Or bank stocks. Is this really a fundamental structural plunging of the United States’ financial system? Doubtful. Moody’s came out with a warning about downgrading certain banks in the United States. It is not 2008. How much of this is psychology? Tweeting causing a run on deposits? Banks everywhere are looking at their liabilities (deposits, since they owe their depositors money) and assets (the money lent out using their depositor’s money, or securities owned. “Lending long and borrowing short” works when banks can pay very little on their deposits (like checking accounts earning 0 percent) and take that money and earn 4 or 6 percent on securities. But when the deposit base becomes unstable, and a bank has to liquidate those securities at 80 or 90 cents on the dollar, it becomes a problem fast. (Much more below.) Today’s podcast can be found here and this week is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking. Today’s has an interview with Bank of England Mortgage’s Quinton Harris on the art and science of forecasting the housing, mortgage, and bond markets.

Mortgage rates drop in wake of bank failures – CNN

  1. Mortgage rates drop in wake of bank failures  CNN
  2. Mortgage Rates Drop Back to Monday’s Lows After More Big Bank Drama  Mortgage News Daily
  3. Buyers, get moving: Today’s 30-year mortgage rates dive below 6% | March 16, 2023  Fox Business

FHFA delays implementation of LLPA DTI fees

The FHFA announced that it would delay the implementation of a controversial upfront fee on Fannie Mae and Freddie Mac borrowers with higher debt-to-income ratios.

Harder for Borrowers to Secure a Loan in February, Credit Availability Hits Multi-Year Lows

Mortgage credit availability fell to just short of its 2012 benchmark level in February. The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) dropped 3.0 percent from its January level to a reading of 100.1. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. “ Mortgage credit availability decreased to its lowest level since January 2013 with all loan types seeing declines in availability over the month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The conforming subindex decreased 4.3 percent to its lowest level in the survey, which goes back to 2011. This decline was driven by the ongoing trend of shrinking industry capacity as mortgage rates stayed significantly higher than a year ago. Additionally, in this volatile rate environment and potentially weakening economy, there was also a reduction in refinance programs offered for low credit score and high-LTV borrowers.”  The MCAI has four component indices. The Conventional MCAI decreased 4.4 percent, while the Government MCAI was down 1.6 percent. The two component indices of the Conventional MCAI fell sharply, the decline in the Conforming MCAI noted by Kan and a 4.4 percent drop in the Jumbo index. The MCAI and its components are calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via a proprietary product from ICE Mortgage Technology. The resulting calculations are summary measures which indicate the availability of mortgage credit at a point in time. All indices were benchmarked on March 31, 2012.

IMBs face ripple effect from recent bank failures 

The threat of warehouse-line contractions and margin calls is real for IMBs after a series of bank failures, but not a foregone conclusion, industry experts say.

‘Compounding challenges’ for homebuyers as rising mortgage rates aggravate shortage of 6.5 million homes — but analysts still see opportunities in spring – Yahoo Finance

‘Compounding challenges’ for homebuyers as rising mortgage rates aggravate shortage of 6.5 million homes — but analysts still see opportunities in spring  Yahoo Finance

New bill calls for restoring mortgage insurance tax deduction

The fight to restore the mortgage insurance tax deduction and make it permanent was revived in Congress, with the introduction of a bipartisan bill in the House of Representatives. However, similar bills in both the House and Senate introduced in the last session failed to gain traction. The move has broad support in the mortgage, … [Read more…]

Adjustable-rate mortgages are growing in popularity, but they come with some big risks – CNBC

Adjustable-rate mortgages are growing in popularity, but they come with some big risks  CNBC