Mortgage Apps Drop Government Wants a Mortgage For All But Crucifies Non-Issues

Mortgage applications dropped today to a six year low. As reported in Mortgage Professional America:

Mortgage applications plummeted last week, dropping 7.2% from the week earlier, according to new data from the Mortgage Bankers Association. Refinances hit their lowest level since 2008.

The drop seems to line up with the latest consumer sentiment survey from Fannie Mae, which found that the percentage of consumers who think it’s a good time to buy a house tied its all-time low last month.

The MBA’s market composite index, which measures loan application volume, dropped 7.2% on a seasonally adjusted basis last week. On an unadjusted basis, the index was down 17% from the previous week. The Refinance Index plummeted 11% from the previous week, hitting its lowest level since November of 2008.

The government wants lenders to get a mortgage to anyone that will qualify, but on the other hand they are assesing record penalties for minor issues on borrowers with credit scores at the bottom range of qualifying.

From the Rob Chrisman Report:

It seems like the authorities are now forcing buybacks and fines over relatively minor errors, and as a result, lenders are refusing to extend credit to low-income / low FICO borrowers. Of course the Administration continues to exhort the industry to loosen standards at the same time it announces record settlements.

At the same time the cost of a mortgage continues to sky-rocket in costs and or the mortgage rate. Why? Two Words “Over-Regualtion”. The pendulum has swung too far the other way. We have gone from too little regulation to way more than necessary all implemented by people that have never worked in the mortgage industry a day in their life.

More from the Chrisman Report:

Remember that there areplenty of reasons that mortgages are more expensive and thus dampening refinancing, including loan level price adjustments, compliance costs, and gfees.

 

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