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Mortgage Apps: Uptick Led By Refis

September 22, 2021
Bottom Line:  Mortgage applications rose last week, led by a 6.5% jump in refi apps. Purchase applications rose for the second week in a row, pushing the trend, measured by the 4-week average, slightly higher.  While still below levels seen in the Spring, purchase applications have rebounded from the lows seen in August. Realtors reported that their clients saw steady 30-year mortgage rates, despite increasing interest rate volatility in the secondary markets.  Current coupon yields in the secondary market were up 5 bps last week, closing at 1.85%, and were down -2.0 bps this week through Tuesday. Overall, trends remained mixed for both purchase and refi applications.  Most indicators suggest housing plateaued at a still historically robust level.  But, so far, most high-frequency data, like this application report, suggest continued robust activity and few signs of any further slowdown.

The MBA Mortgage Applications Index
ROSE by 4.9% during the week ended September 17 to 742.7,  modestly above its 13 week average of 712.8 but 8.1% BELOW its year-ago level.
The Purchase Index
ROSE by 2.2% to 283.9, moderately above its 13 week average of 259.6 but 13.2% BELOW its year-ago level.
The Refinance Index ROSE by 6.5% to 3,391. Despite this increase, refinancing activity is slightly above its 13 week average of 3,341 but 5.3% BELOW its year-ago level.
Contract Mortgage Rates
were MIXED with the 30-year fixed rate unchanged at 3.03% and the 15-year fixed rate was unchanged by 0 bp to 2.34%.
Key findings of MBA's Forbearance and Call Volume Survey - September 6 to September 12, 2021
  • Total loans in forbearance decreased by 8 basis points relative to the prior week: from 3.08% to 3.00%.
    • By investor type, the share of Ginnie Mae loans in forbearance remained the same relative to the prior week at 3.39%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.52% to 1.47%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 7.27% to 6.95%.
  • By stage, 11.3% of total loans in forbearance are in the initial forbearance plan stage, while 80.2% are in a forbearance extension. The remaining 8.5% are forbearance re-entries.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.05%.
  • Of the cumulative forbearance exits for the period from June 1, 2020, through September 12, 2021, at the time of forbearance exit:
    • 28.6% resulted in a loan deferral/partial claim.
    • 21.9% represented borrowers who continued to make their monthly payments during their forbearance period.
    • 16.4% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
    • 12.7% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
    • 11.6% resulted in a loan modification or trial loan modification.
    • 7.4% resulted in loans paid off through either a refinance or by selling the home.
    • The remaining 1.4% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls decreased relative to the prior week: from 7.7% to 6.3%.
    • Average speed to answer increased from 1.6 minutes to 1.8 minutes.
    • Abandonment rates increased from 4.0% to 4.8%.
    • Average call length increased from 8.2 minutes to 8.3 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of September 12, 2021:
    • Total: 3.00% (previous week: 3.08%)
    • IMBs: 3.25% (previous week: 3.33%)
    • Depositories: 3.10% (previous week: 3.15%).