Rates Exceed 6%, Applications Tumble

Mortgage loan application volume fell last week as mortgage rates topped 6% for the first time since 2008, nearly doubling year over year. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index, a measure of mortgage loan application volume, decreased by 1.2%. The adjusted purchase index rose 0.2%, while the unadjusted purchase index dropped 12% and was 29% lower YOY. The refinance index dropped by 4% and was 83% lower than the same time last year. Refis made up 30.2% of total applications. “Higher mortgage rates have pushed refinance activity down more than 80 percent from last year and have contributed to more homebuyers staying on the sidelines. Government loans, which tend to be favored by…

Who Do 15-Year Fixed Rate Mortgages Work For?

Faced with inflation pressure and rising rates, many borrowers are seeking lower monthly mortgage payments in the form of ARMs or longer terms. But lower monthly payments come with a price. LendingTree analyzed 380,000 loans to determine how much more borrowers with 30-year loans pay than those with 15-year loans. They found that borrowers with 15-year fixed rate mortgages saved an average of $215,000 in interest across the loan’s lifetime. Of course, 15-year loans also required borrowers to pay an average of $572 more a month in order to rack up those savings. One reason shorter-term loans save borrowers so much money is that their interest rates are typically lower. The 30-year fixed rate averaged 5.89% last week, while the…

Fraud Risk Fell Overall In Q2, Though Fraud Associated With Purchase Loans Ticked Up

Mortgage fraud risk dropped 7.5% YOY in Q2 2022, with one in 131 mortgage applications containing instances of fraud, CoreLogic reported. In contrast, Q2 2021 saw fraud in 1 in 120 applications. Mortgage fraud is defined as the deliberate act of lying or omitting information that is used by an underwriter or lender to fund, purchase, or insure a mortgage loan. CoreLogic’s Mortgage Fraud Risk Index showed fraud risk in mid-2022 coming down from a point of high risk in 2021. The company said it is also partly due to a recalibration of its sourcing model in Q1 2022. After the update, the index showed higher risk during certain months in Q2. For example, while overall fraud risk fell, income…

Leaders: Putting People First Pays Off

By KIMBERLEY HAAS Three providers of customer relationship management services say that as the housing market changes and technology becomes better, focusing on the people behind the transactions pays off. Petra Cephas President Bishoi Nageh, Bonzo CEO Chad Jampedro, and Big Purple Dot CEO Roxana Davidoff recently sat down with The Mortgage Note and this is what they had to say on the topic. Leaders at Petra Cephas in New Jersey recently announced that its sales team has grown by 100 percent over the past 12 months. They attribute that growth to the boutique mortgage company’s human-based customer relationship management system and their ability to free up loan officers from non-sales related tasks so they can spend all of their time…

More Than Half Of New Homes Face Climate-Related Damage

More than half of U.S. homes built in the last ten years face risk from climate change, a huge jump from previous decades, Redfin reported. Redfin analyzed climate-risk scores from ClimateCheck and county records on homes built since 1900 to determine how many homes have a higher risk of climate-related damage. Fifty-five percent of homes are at risk for fires, while 45% are in drought-prone areas. This is a massive increase from the first half of the 20th century when only 14% of homes were in high fire risk areas and 37% faced droughts. New homes are also more vulnerable to heat and floods– almost 100% of homes built in the last two years see increased heat risk– but fire…

Rates Reach Highest Point In More Than A Decade

Mortgage rates hit their highest point in almost 14 years last week, up from 5.66% to 5.89%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.89%. A year ago at this time, the 30-year FRM averaged 2.88%. “Mortgage rates rose again as markets continue to manage the prospect of more aggressive monetary policy due to elevated inflation,” said Sam Khater, Freddie Mac’s Chief Economist. “Not only are mortgage rates rising but the dispersion of rates has increased, suggesting that borrowers can meaningfully benefit from shopping around for a better rate. Our research indicates that borrowers could save an average of $1,500 over the life of a loan by getting one…

Bad Behavior In Lending: Sham Job Interviews, “Rampant” Fraud

By CHUCK GREEN Alleged bad behavior and fraudulent activity in the mortgage industry have made news headlines in recent years and despite attempts to get lending leaders to shape up their ships, at least one person who reports on these issues says problems are common, even “rampant.” One of the most recent examples of these alleged incidents involved sham job interviews for Black and female candidates at Wells Fargo & Company. Wells Fargo in California has approximately $1.9 trillion in assets. They serve one in three U.S. households and more than 10% of small businesses in the United States. According to former executive Joe Bruno, company leaders at Wells Fargo allegedly put minority candidates through the interview process for positions…

Volume Of Home Price Drops Up 95% YOY

Home price drops are up more than 95% from last year as the market cooldown continues into fall, according to HouseCanary’s latest Market Pulse report. The report compares data between August 2021 and August 2022 and is an ongoing review of insights from HouseCanary’s platform. The data shows that the monthly nationwide supply continues shrinking as interest rates increase. Combined with seasonal slowdown after the spring and summer buying seasons, net new listing volume and contract volume fell YOY across all price points. “The nationwide supply shortage accelerated by the Fed’s rate hikes and economic concerns persisted through the end of the summer despite a slight increase in inventory back in June,” said Jeremy Sicklick, Co-Founder and Chief Executive Officer…

Purchase, Refi Applications Fall Again

Mortgage loan application volume fell last week, with both refis and purchase applications falling as interest rates hit their highest point since mid-June, the Mortgage Bankers Association’s weekly survey shows. The adjusted Market Composite Index, a measure of mortgage loan application volume, decreased by 0.8%. The adjusted purchase index fell 1%, while the unadjusted purchase index dropped 3% and was 23% lower YOY. The refinance index dropped by 1% and made up 30.7% of total applications, down 83% from the same time last year.  “Mortgage rates moved higher over the course of last week as markets continued to re-assess the prospects for the economy and the path of monetary policy, with expectations for short-term rates to move and stay higher…

Milo Offering First Crypto Refi Product

Crypto-lender Milo Credit has launched the first-ever cryptocurrency refinance offering, according to a press release. The refinance product uses crypto assets and property as the basis of the loan, allowing currency-holders to pledge both to cash out up to 100% of their home equity value in U.S. dollars. It is geared towards homeowners who sold their crypto or took out a short-term crypto loan to buy a home in cash, allowing them to extend the repayment term to 30 years and access more financing. Milo says it also requires less collateral than other similar products, just 1x the loan amount or less compared to 2 or 3x. “Based on the success of our crypto mortgage offering, we are now able…