Article Attachment

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

Mortgage Apps: Decline After Rebound, Despite Lower Rates

November 3, 2021
Bottom Line:  Mortgage applications fell again last week after rebounding slightly following sharp declines earlier this month and late last. The purchase index slipped just slightly, but the refi index fell over 4%, despite a slight decrease in mortgage rates.  The 30-year fixed-rate mortgages averaged 3.24%, down slightly but still up from 3% in early August. Current coupon yields in the secondary market were down -11.0 bps last week, closing at 2.0%, and were little changed this week through Tuesday.
Overall, the trend in rates has shifted, and so have the trends in applications for refis and now purchases.

The MBA Mortgage Application Index
FELL -3.3% at 624.0, BELOW the 13-week average of 701.0 and -25.6% BELOW the year-ago level.
The Purchase Index FELL -1.6% at 271.0, ABOVE the 13-week average of 268.0 but -10.0% BELOW the year-ago level.
The Refinancing Index FELL -4.3% at 2645.0, BELOW the 13-week average of 3199.0 and -33.0% BELOW the year-ago level.
The effective (adjusted for points paid) 30-year mortgage rate FELL 6bps to 3.34, ABOVE the 13-week average of 3.20 and 22bps  ABOVE the year-ago level.

Key findings of MBA's Forbearance and Call Volume Survey - October 18 to October 24, 2021
  • Total loans in forbearance decreased by 6 basis points relative to the prior week: from 2.21% to 2.15%.
    • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 2.72% to 2.65%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.00% to 0.97%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 5.21% to 5.13%
  •  By stage, 15.6% of total loans in forbearance are in the initial forbearance plan stage, while 74.2% are in a forbearance extension. The remaining 10.2% are forbearance re-entries, including re-entries with extensions.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.04%.
  • Of the cumulative forbearance exits for the period from June 1, 2020, through October 24, 2021, at the time of forbearance exit:
    • 29.1% resulted in a loan deferral/partial claim.
    • 20.6% represented borrowers who continued to make their monthly payments during their forbearance period.
    • 16.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
    • 13.1% resulted in a loan modification or trial loan modification.
    • 12.0% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
    • 7.1% 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 5.9%.
    • Average speed to answer decreased from 2.1 minutes to 1.5 minutes.
    • Abandonment rates decreased from 5.7% to 4.0%.
    • Average call length decreased from 7.9 minutes to 7.8 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of October 24, 2021:
    • Total: 2.15% (previous week: 2.21%)
    • IMBs: 2.43% (previous week: 2.49%)
    • Depositories: 2.07% (previous week: 2.11%)
MBA's latest Forbearance and Call Volume Survey covers the period from October 18 through October 24, 2021, and represents 73% of the first-mortgage servicing market (36.7 million loans).