Article Attachment

The attached file contains this articles commentary as well as tables and charts of the data.

Mortgage Apps: Mostly Steady Going Into Holiday Weekend

July 8, 2020

Bottom Line: The 30-year fixed-rate mortgage neared 3.25% last week, keeping purchase and refi activity robust . Applications were higher after adjusting for Friday's bank closures for the 4th of July holiday. Overall, both volumes of applications for purchase and refinancing are strong with purchase activity trending notably higher. Refinancings spiked as rates plunged in mid-March and have since come down but remain at 5+ year highs. Purchase volumes initially declined but rebounded quickly and are now at the highest levels since the financial crisis.

Separately, the MBA's Forbearance and Call Volume Survey showed another small decline in total loans in forbearance for the third time since the shutdowns for the novel coronavirus started.

The MBA Mortgage Applications Index ROSE by 2.2% during the week ended July 3 to 775.9, slightly above its 13 week average of 761.9 and 53.4% ABOVE its year-ago level.

The Purchase Index ROSE by 5.3% to 325.2, sharply above its 13 week average of 265.9 and 18.0% ABOVE its year-ago level.

The Refinance Index ROSE by 0.4% to 3,374. Despite this increase, refinancing activity is moderately below its 13 week average of 3,661 but 87.5% ABOVE its year-ago level.

Contract Mortgage Rates FELL with the 30-year fixed rate declining by 3 bps to 3.26% and the 15-year fixed rate declining by 4 bps to 2.77%.

Key findings of MBA's Forbearance and Call Volume Survey - June 22 to June 28, 2020

  • Total loans in forbearance decreased by 8 basis points relative to the prior week: from 8.47% to 8.39%.
    • By investor type, the share of Ginnie Mae loans in forbearance decreased from 11.83% to 11.72%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 6.26% to 6.17%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 10.07% to 10.08%.
  • Forbearance requests as a percent of servicing portfolio volume (#) decreased across all investor types: from 0.14% to 0.12%.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls decreased from 7.8% to 6.8%.
    • Average speed to answer increased relative to the prior week from 1.8 minutes to 1.6 minutes.
    • Abandonment rates decreased from 5.5% to 5.0%.
    • Average call length increased from 7.0 minutes to 7.5 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of June 28, 2020:
    • Total: 8.39% (previous week: 8.47%)
    • IMBs: 8.33% (previous week: 8.42%)
    • Depositories: 9.03% (previous week: 9.09%)
MBA's latest Forbearance and Call Volume Survey covers the period from June 22 through June 28, 2020, and represents 76% of the first-mortgage servicing market (38.2 million loans).

Article by Contingent Macro Advisors