Despite a healthy upward
bump in purchase applications, overall mortgage volume declined last week. The
Mortgage Bankers Association (MBA) said its Market Composite Index, a measure
of application volume, dipped 0.3 percent on a seasonally adjusted basis during
the week ended November 13, and was down 2 percent unadjusted. The week’s
results were not adjusted to account for the Veterans’ Day holiday that occurred
Index was down 2 percent from the previous week but was 98 percent higher than
the same week one year ago. The refinance share of mortgage activity decreased
to 69.8 percent of total applications from 70.0 percent the previous week.
adjusted Purchase Index rose 4 percent. It was 1 percent lower than the prior
before adjustment but was up 26 percent compared to the same week in 2019.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
activity was mixed last week, despite the 30-year fixed rate mortgage staying
below 3 percent. The purchase market recovered from its recent weekly slump,
with activity increasing 3 percent and climbing above year-ago levels for the
26th straight week. Housing demand remains supported by the ongoing
recovery in the job market, and an increased appetite from households seeking
more space because of the pandemic,” said Joel Kan, MBA’s Associate Vice
President of Economic and Industry Forecasting. “The refinance index decreased
last week – driven by sharp declines in FHA and VA applications – but remained
a robust 98 percent above a year ago. The average refinance loan balance of
$291,000 last week was the lowest since January. Many borrowers with higher
loan balances may have acted earlier on in the current refinance wave.”
The FHA share of
total applications dipped to 10.5 percent from 10.6 percent the previous week
and the VA share decreased to 12.1 percent from 12.6 percent. USDA applications
increased to a 0.5 percent share from 0.4 percent. The balance of all loans
originated during the week declined from $319,100 to $314,600 but purchase loan
balances increased by $800 to $368,900
contract interest rate for 30-year fixed-rate mortgages (FRM) with origination
balances at or below the conforming limit of $510,400 increased to 2.99 percent
from 2.98 percent, with points increasing to 0.37 from 0.35. The effective rate increased from last
average contract interest rate for jumbo 30-year FRM, loans with balances
exceeding the conforming limit, decreased to 3.11 percent from 3.13 percent.
Points decreased to 0.28 from 0.31 and the effective rate declined.
Thirty-year FRM backed
by the FHA had a contract rate of 3.11 percent, up from 3.08 percent. Points
were unchanged at 0.37 and the effective rate increased from the prior week.
contract interest rate for 15-year FRM fell 4 basis points to 2.59 percent and points
declined to 0.35 from 0.37. The effective rate was higher.
contract interest rate for 5/1 adjustable rate mortgages (ARMs} increased to
2.84 percent from 2.79 percent, and points increased to 0.53 from 0.42.
The effective rate moved higher. The ARM share of activity decreased
week-over-week from 2.0 percent to 1.9 percent.
MBA’s Weekly Mortgage Applications Survey has been conducted
since 1990 and covers over 75 percent of all U.S. retail residential
applications Respondents include mortgage bankers, commercial banks, and
thrifts. Base period and value for all indexes is March 16, 1990=100 and
interest rate information is based on loans with an 80 percent loan-to-value
ratio and points that include the origination fee.
latest Forbearance and Call
Volume Survey found that, as of November
8, an estimated 2.7 million mortgage loans were in forbearance. This is 5.47 percent
of the loans in servicer portfolios, down 20-basis points from the previous
week and the 11th straight week the total has improved.
stage, 21.68 percent of total loans in forbearance are in the initial
forbearance plan stage, while 76.46 percent are in a forbearance extension. The
remaining 1.86 percent are forbearance re-entries.
The share of GSE
loans in forbearance dropped 13 basis points to 3.36 percent of the Fannie Mae
and Freddie Mac portfolios. Ginnie Mae (FHA/VA) loans in forbearance decreased 25 basis points
to 7.70 percent, and the forbearance share for portfolio loans and
private-label securities (PLS) fell by 32 basis points to 8.38 percent. The
percentage of loans in forbearance for independent mortgage bank (IMB)
servicers decreased 25 basis points and those in depository servicer portfolios
decreased 17 basis points from the previous week to 5.94 and 5.43 percent,
“Declines in the share of loans in forbearance
continued this week, with a significant increase in the rate of forbearance
exits – particularly for
portfolio and PLS loans,” said
Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “More
than 76 percent of borrowers in forbearance are now in an extension, as we are
well past the six-month point for most borrowers’ forbearance plans.”
the borrowers who have exited forbearance since the June 1:
percent continued to make their monthly payments during their forbearance
percent resulted in a loan deferral/partial claim.
percent reinstated their loans, paying back past-due amounts upon their exit.
percent did not make all their monthly payments and exited forbearance without
a loss mitigation plan in place.
percent paid off their loans through a home sale or refinance.
percent received a loan modification.
remaining 1.9 percent resulted in repayment plans, short sales, a deed-in-lieu,
or other outcomes.
MBA’s latest Forbearance and Call Volume Survey covers
the period from November 2 through November 8, 2020 and represents 74 percent
of the first-mortgage servicing market (37.1 million loans).