Category: Mortgage News

Higher interest rates pushed refinancing lower in August and lenders moved to generate more origination activity. That, in part, led to an increase in overall credit access. The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) gained 3.9 percent to 123.7 during the month. An increase in the index indicates credit is loosening.

The Conventional MCAI increased 7.6 percent, while the Government MCAI grew 1.1 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI was up 9.4 percent, and the Conforming MCAI rose by 5.1 percent.

“Credit availability increased in August, driven by significant activity across all indexes,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “This expansion was heavily driven by the addition of refinance loan programs at a time when the 30-year fixed rate has been above 3 percent for the past month, and refinance activity has trended lower.

American homeowners got $20,000 richer in the second quarter just sitting in their family room. Black Knight’s newest Mortgage Monitor says that was the average gain in borrower equity during the quarter as home prices continued to soar.

Tappable equity, the amount available to homeowners before reaching a maximum 80 percent combined loan-to-value (CLTV) ratio, hit a record high total of $9.1 trillion, a $1 trillion increase in a single quarter. The average mortgage holder saw his/her tappable equity grow by $20,000 during that period to a total of $173,000.

The weighted average CLTV for the mortgage market is now 46 percent, the lowest leverage on record. Fewer than 3 percent of mortgaged homeowners have less than 10 percent equity and only 0.6 percent are underwater, both record low figures.

The GSEs, Fannie Mae and Freddie Mac, will be required to submit Equitable Housing Finance Plans to their regulator the Federal Housing Finance Agency (FHFA) by the end of the year. The plans, which will be updated annually, will identify and address barriers to sustainable housing opportunities for the next three years. FHFA also will require the GSEs to submit annual progress reports on the actions undertaken during the prior year to implement their plans. “For generations, discriminatory practices like redlining have prevented communities of color from building wealth through homeownership,” said FHFA Acting Director Sandra L. Thompson. “By identifying the barriers to equitable and sustainable housing finance opportunities and setting goals for addressing those barriers, the [GSEs], consistent with safety and ?soundness, can responsibly reduce the racial and ethnic disparities in homeownership and wealth that still exist today.”

Applications for mortgage financing declined again during the week ended September 3. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, was down 1.9 percent on a seasonally adjusted basis heading into the Labor Day weekend and was 3 percent lower on an unadjusted basis. The Refinance Index decreased 3 percent from the previous week and was 4 percent below the volume one year ago. Applications for refinancing represented 66.8 percent of the total, unchanged from the week before. Purchase mortgage volume declined slightly with the seasonally adjusted Purchase Index down 0.2 percent. The unadjusted version was 3 percent lower week-over-week and down 18 percent compared to the same week in 2020.