Mortgage Applications Plunge As Rates Soar

Posted on April 23rd, 2008 in Daily Mortgage/Housing News - The Real Story

Good Morning. When rates click over 5.75%, applications slow and over 6% on 30-year fixed product, the mortgage market seizes. In the good ‘ol days, exotic programs would fill the void because many programs, such the Pay Option ARM, were impervious to rate increases…remember it is all about the monthly payment. Two things to consider here when reading the link below; the 6.04% average rate they quote is not reality because at ‘no-points’ it is closer to 6.25% on a $417k loan and 7.0% on an new Agency ‘Con’-Jumbo; and the number of applications that actually close remains extremely low, hovering around 40% from research I have done at four national banks.

This ties in nicely with the report I posted a few days back that was highly ridiculed by some but now looks extremely accurate and foresighted called NEW FANNIE/FREDDIE ‘CON’ JUMBOS ALREADY A BUST Best, Mr Mortgage

*(Reuters) NEW YORK – Mortgage applications plunged last week, largely reflecting a drop in demand for home refinancing loans as interest rates surged, an industry group said on Wednesday.

9 Responses to “Mortgage Applications Plunge As Rates Soar”

  1. “Highly Ridiculed”?!! By WHO?-The NAR? BofA?? So is Peter Schiff and Robert Schiller, and they have proven to be almost conservative in their predicitions!!

    LOL– Just have to say how much we are enjoying your posts, Mr. Mortgage–The REIC must HATE YOU, but please keep fighting the good fight and exposing the utter garbage these banks and lenders have flooded the market with.

    The average JSP has Nooooo idea what is really happening– and the information you put out is a tremendous start in educating the masses–God knows we aren’t going to get the TRUTH from the mainstream media.

    THANKS AGAIN–and have a GREAT DAY!!


  2. Hey- Mr M!!

    I would love to know more about the disaster that is the Monolines, (Ambac, MBIA)etc. Would love to see you do a piece to educate people on their scandals. Just an idea!

  3. what question about ABK – how in the hell do youlose more than your stock price in a single quarter. BWAHAHAHAHA. I have some good stuff on the monolines. Actually check out AGO – for the record I am short. Look for Reggie Middleton’s blog on Assurred Guaranty in Yahoo in Blogs. It is good.


    Interesting article on Bears bailout, someone knew something prior to that week. Was JPM going short on BS?


    Amen brother spread the word.

  6. Can these numbers actually be worse than reported considering individual borrowers are filing multiple applications for loan approval?

  7. oh yea, only about 30-40% of all ‘applications’ actually fund. It used to be 70% for most of the mortgage industry’s history. That of course, just makes the lender less profitable because the staff does work on loans that do not close, thus higher rates. Everything results in higher rates.

  8. mortgage applications in th UK down 46% yoy to Mar 08.Everything you’re talking about is coming our way too.Even worse possibly as I think we reached av hom to ave salary of 8 times

  9. Nope – you are way off with that.. Wron on too many levels to count..

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