via NYT

Merrill Lynch’s Rich Bernstein adds:

“The weekly percent change of the Mortgage Bankers Association Index of Applications was the greatest since at least 1990. However, a report last night on National Public Radio might lend some insight behind the numbers. The report suggested that mortgage applications, especially for refinancing, were rising. However, the report noted that the gap between applications and approvals was widening because home values have fallen. Situations in which applicants had extremely high credit scores and were up-to-date on mortgage payments were being denied refinancing without going through
the full home appraisal process…

If this NPR report is accurate, then it suggests that the stock market has greatly over-reacted to today’s mortgage data. Rather than showing a consumer sector that is ready, willing, and able to purchase a home, it might reflect a consumer sector that is increasingly strapped for cash flow and making multiple applications in hope of being accepted for refinancing.


A Rush Into Refinancing as Mortgage Rates Fall
NYT, December 3, 2008

Category: Credit, Digital Media, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Mortgage Refinancings Soar”

  1. Grindstone Financial says:

    There was some commentary to this effect on CNBC yesterday. One of their reporters said that bankers saw a huge number of applications coming from people that already had loans in process. They re-applied in an effort to take advantage of the dip in rates last week.

    Like most data, the market’s mistaken interpretation of a headline created a trading opportunity.

  2. jmborchers says:

    The biggest stock market ralley of all times has just begun. I have no doubt about it.

  3. jerrya1 says:

    Live in a homesteaded property in South Florida and have a very high FICO score. Tries to refi and was told to bring $25K to the table if I want to refi otherwise told to stick it by the bank. This is the reality. I’d like to see a program that allowed me to sell at a losspay my loan balance off and deduct this loss from my taxes in 1-3 years as opposed to the ridiculous $3K per year. My 60k loss would take years to recover otherwise. Perhaps I should just charter a bank and apply for TARP funds.

  4. dbmd says:

    jmborchers Says:
    December 4th, 2008 at 10:24 am

    The biggest stock market ralley of all times has just begun. I have no doubt about it.

    please elaborate. i would not want to miss “the biggest stock market ralley of all times.”
    and i assume that you must be right on your prediction since no one here has called you out. thanks.

  5. Juliius says:

    “…the gap between applications and approvals was widening…” seriously understates the matter. As rates plummeted last week – of course applications rose to all-time levels however, qualified applications are another matter and approvals yet another. It is a total misnomer to state “Mortgage Refinancings Soar” – the truth of the matter is that mortgage applications rose – lenders haven’t changed any of their standards/requirements – it is every bit as difficult to get a loan this week as it was last week…

  6. these # of applications reports are a total waste of’s so similiarto reporting ‘foot-traffic’ at the mallz..

    when total U$D lending amounts pick up, it’ll be time to pay attention, til then, if the Top gets any more Spin, it’ll turn into an auger..