Mortgage application market has experienced a surge before a new TRID take into effect which made the applications jumped with 25 percent. However, mortgage applications dove down with 28 percent last week after the new TRID has taken effect.
According to cnbc.com, Mortgage Bankers Association has confirmed that mortgage applications has plummeted with 27.6 percent on a seasonally adjusted basis for the week.
The decline was known to be expected as mortgage applications suddenly went up before the implementation of new mortgage disclosure rules. Borrowers feared that the lender's major changes in processing their loan applications will slow the process and approval of their applications thus making them rush to get their applications before the rules went into effect last October 3.
Michael Fratantoni, Mortgage Bankers Association's chief economist said, "The prior week's results evidently pulled forward much of the volume that would have more naturally taken place into this week. Purchase volume for the week was below last year's pace, the first year-over-year decrease since February 2015, while refinance volume dropped sharply even with little change in mortgage rates."
Refinancing applications also fell with 23 percent and applications for purchasing a new home also declined with a straight 34 percent which made the purchase volume down with 1 percent compared to last tear's same week.
Fratantoni also added "Purchase loans are likely to be more impacted by the regulatory change, as the closing dates tend to be more sensitive than those for refinance transactions."
According to housingwire.com, Federal Housing Administration also felt the decline in applications as their total applications fell to 12.6 percent compared to last week's 12.7 percent.
Despite of the mortgage market's volatility, the average contract interest in a fixed 30- year- mortgage plan with conforming loan balance remained in untouched at 3.99 percent while fixed 30- year mortgage plan with jumbo balance also remained untouched at 3.89 percent.
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