Mortgage Applications Continue Downward Trend | Top Predictions


iLeads Mortgage Market Minute

Mortgage applications decreased 13.1% for the week ending Feb. 18 to the lowest level since December 2019, as mortgage rates eclipsed the 4% mark. We hope you enjoyed last week’s edition where we talked about Conforming Loan Access At Nine Year Low. This week we’re bringing you:


What should lenders look for in servicing solutions?*

As more borrowers exit forbearance, it’s time to reevaluate your servicing software



With rising interest rates and compressed margins, many lenders are looking to their servicing business to grow revenue. However, working with borrowers exiting forbearance programs adds another layer to an already complex process which could raise costs. Lenders who want to thread the needle between the different interests of borrowers, investors and regulators need smart, efficient mortgage software solutions to meet their servicing goals.

New investor guidelines
Borrowers exiting forbearance plans have a number of options, all of which require servicers to have a seamless, flexible process to communicate and place borrowers into appropriate work-out plans. At the same time, those options trigger specific additional requirements from investors, including reporting principal and interest collection activity, drafting funds due to the investor, resolving any reporting or drafting discrepancies, and reconciling custodial accounts.

To make things even more complicated, the two biggest investors — Fannie Mae and Freddie Mac — continue to adjust their guidelines amid the unpredictable nature of the global pandemic. And the stakes are high. Regulators have ended some of the flexibilities they put in place during the pandemic and have put servicers on notice that they will be scrutinizing how they handle their dual responsibilities toward borrowers and investors.

In this environment, lenders need mortgage servicing software that automates operations from payment processing to investor reporting according to multiple variables.

Read more in-depth here.


Home Prices Aren’t Slowing Down (Yet)*

ServiceMac, a First American company, will handle the servicing operations and hire Homepoint’s former employees



Home price appreciation peaked in July with the FHFA House Price Index up 19.3% year-over year and the S&P CoreLogic Case-Shiller 20-City Index up 20.0%. Both have come off the boil since then, but only slightly.

Today brought the most recent update for both reports (through December). Here are the relevant details:

Monthly Home Price Change

  • Case Shiller (national) +1.5% (1.2% previously)
  • FHFA (national) +1.2% (1.2% previously)

Annual Home Price Change

  • Case Shiller (20-City) +18.6% (18.3% previously)
  • Case Shiller (national) +18.8 (18.8% previously)
  • FHFA (national) +17.6% (17.6% previously)

In other words, prices are showing a relatively relentless determination to maintain an upward trajectory. As far as December’s data is concerned, price growth has merely leveled off as opposed to having turned a major corner back in July.

Read more in-depth here.


Mortgage apps continue downward trend*

Mortgage apps declined 13% to the lowest level since December 2019



The Mortgage Bankers Association‘s seasonally adjusted refi index fell 15.6% from the previous week, bringing its share of total applications to almost equal the purchases share at 50%. Meanwhile, the purchase index dropped 10.1%, falling again for the third straight week.

Compared to the same week one year ago, mortgage apps overall dropped 41%, with a sharp decline in refi (-56.4%) compared to purchase (-5.4%). The survey, conducted weekly since 1990, covers over 75% of all U.S. retail residential mortgage applications.

According to Joel Kan, MBA’s associate vice president of economic and industry forecasting, the 30-year fixed rate increased almost a full percentage point in comparison to one year ago.

The trade group estimates that the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) increased to 4.06% from 4.05% the week prior. For jumbo mortgage loans (greater than $647,200), rates rose to 3.84% from 3.81% the week prior.

Mortgage applications dropped to their lowest level since December 2019 last week, as mortgage rates continued to inch higher,” Kan said. “Higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022.”

The survey showed that the refi share of mortgage activity decreased to 50.1% of total applications last week, from 52.8% the previous week. VA apps rose to 9.9% from 9.3% in the same period.

Read more in-depth here.


Finding highly affordable leads to keep sales coming in

At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

You can also schedule a call here.

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