Here is a decent article from an online news writer, JANN SWANSON.

Rates Continue to Stoke Refinancing Surge

Jan 21 2015, 7:34AM
Applications for mortgage refinancing scored a second straight week of solid growth during the period ended January 16, with the Mortgage Bankers Associations (MBA) Refinance Index increasing 22 percent week-over-week. That’s an impressive level of growth in light of the fact that last week’s refi activity already posted a 66 percent improvement. The share of mortgage applications that were for refinancing increased from 71 percent to 74 percent, the highest share for refinancing since May 2013.

The overall MBA Market Composite Index rose 14.2 percent on a seasonally adjusted basis and was up 17 percent on an unadjusted basis. Here too, any additional gains in the Composites were in themselves notable, building as they were building atop the previous week in which the adjusted and non-adjusted indexes had roared back from the holiday period with increases of 49.1 percent and 119 percent respectively.

Applications for purchase mortgages were much more subdued. The seasonally adjusted Purchase Index was down 3 percent from the week ended January 9. The unadjusted Purchase Index rose 3 percent week-over-week and was 3 percent higher than the index during the same week in 2013.

Mike Fratantoni, MBA’s Chief Economist said, “Mortgage application volume increased last week to its highest level since June 2013, led by a 22 percent increase in refinance application volume. This increase was largely due to mortgage rates dropping to their lowest level since May 2013. However, the recent reduction in FHA mortgage insurance premiums also played a role: FHA refinance applications increased 57 percent last week. Even with this increase, refinances made up only 48 percent of FHA volume, compared to 73 percent for VA, and 77 percent for conventional loans,”

Fratantoni continued, “Conventional purchase applications were down about 3 percent for the week on a seasonally adjusted basis, but up 5 percent relative to last year at this time. FHA purchase applications were down 1 percent for the week on a seasonally adjusted basis.”

Conventional refinance applications increased 21 percent relative to the previous week, while government refinances increased 29 percent. That gain was driven by the 57 percent surge in applications for FHA loans noted by Fratantoni which also boosted the FHA share of refinance applications to 5.2 percent from 4.1 percent the prior week.

The FHA share of total applications increased to 8.0 percent this week from 7.5 percent last week while the VA share slipped 3 basis points to a 9.4 percent share. The USDA share of total applications decreased to 0.6 percent from 0.8 percent last week.

Mortgage interest rates continued to fall with all contract rates for fixed rate products back to May 2013 levels and effective rates down from the previous week. The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conventional balances of $417,000 or less was 3.80 percent with 0.29 point compared to 3.89 percent with 0.23 point a week earlier. The jumbo 30.year FRM (balances above $417,000) had a rate of 3.86 percent, down 2 basis points with points unchanged at 0.23.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.66 percent from 3.71 percent. Points increased to 0.15 from -0.05.

Fifteen-year FRM contract rates backed down to 3.10 percent from 3.16 percent. Points dipped to 0.29 from 0.30.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) decreased to 2.87 percent, the lowest level since June 2013, from 2.94 percent, with points decreasing to 0.41 from 0.46 The ARM share of activity increased to 6.4 percent of total applications from 5.9 percent the week before..

MBA’s data is gathered from its Weekly Mortgage Application Survey which covers over 75 percent of all U.S. retail residential mortgage applications. The survey has been conducted since 1990 among mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100 and interest rates information is quoted for loans with an 80 percent loan-to-value ratio. Points include the origination fee.


A loan officer died and went up to St. Peter at the Pearly Gates to present himself for admittance to Heaven. Peter said, “You did a lot of good helping people get into homes and you donated lot to charity and worked on that Habitat house. But you told too many fibs to the underwriters and were unkind to your processor. We aren’t sure where you are going to fit. Sowe’ve decided to show you around both
Heaven and Hell and see where you feel more comfortable. ”

As they toured Heaven, the loan officer really liked the big mansions and the streets paved with gold, but the harp music got on his nerves. Then when they showed him around Hell, he noticed everyone had their choice of playing golf or tennis, hanging out by the pool, smoking and drinking, or dancing and playing cards in the clubhouse.

He told St. Peter, “Oh, this is going to be hard! Can I sleep on it?” So he was allowed to think it over during the night.

The next morning they asked him for his decision. He quickly replied, “Oh please send me to Hell!”

So they opened up the doors to Hell, but the whole picture had changed! It was just like you have always heard with fire and brimstone! People were burning and being tortured and screaming! Oh it was so hot and horrible!!

“Hey, that’s not what you showed me yesterday!!” the loan officer cried.

St. Peter’s cold reply:
“You should have locked-in yesterday!”