WASHINGTON (MNI) – The following is the Mortgage Bankers Assoc.
summary of its weekly survey of mortgage applications, published
Wednesday:

Mortgage Applications Decrease in Latest MBA Weekly Survey

WASHINGTON, D.C. (February 1, 2012) – Mortgage applications
decreased 2.9 percent from one week earlier, according to data from the
Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey
for the week ending January 27, 2012.

The Market Composite Index, a measure of mortgage loan application
volume, decreased 2.9 percent on a seasonally adjusted basis from one
week earlier. On an unadjusted basis, the Index increased 9.0 percent
compared with the previous week. The Refinance Index decreased 3.6
percent from the previous week. The seasonally adjusted Purchase Index
decreased 1.7 percent from one week earlier. The unadjusted Purchase
Index increased 17.1 percent compared with the previous week and was 4.3
percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market
Index is up 4.11 percent. The four week moving average is up 2.48
percent for the seasonally adjusted Purchase Index, while this average
is up 4.22 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 80.0 percent
of total applications from 81.3 percent the previous week. The
adjustable-rate mortgage (ARM) share of activity increased to 5.6
percent from 5.3 percent of total applications from the previous week.

“The Federal Reserve surprised the market last week by indicating
that short-term rates were likely to stay at their current low-levels
until the end of 2014. Longer-term treasury rates dropped in response,
and mortgage rates for the week were down slightly as a result,” said
Michael Fratantoni, MBA’s Vice President of Research and Economics.
Fratantoni continued, “Although total application volume dropped on an
adjusted basis relative to last week, refinance volume remains high,
with survey participants reporting that the expanded Home Affordable
Refinance Program (HARP) contributed to roughly 10 percent of their
refinance activity.”

In December 2011, Connecticut had the largest increase in refinance
applications, increasing by 80.1 percent from November. Maine saw a 30.8
percent increase in applications for home purchase, which was the
largest state-increase in applications for home purchase. Only 12 states
had a decrease in home purchase activity in December, while every state
in the US saw an increase in refinance volume.

The average contract interest rate for 30-year fixed-rate mortgages
with conforming loan balances ($417,500 or less) decreased to 4.09
percent from 4.11 percent, with points decreasing to 0.41 from 0.47
(including the origination fee) for 80 percent loan-to-value (LTV) ratio
loans. The effective rate also decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages
with jumbo loan balances (greater than $417,500) decreased to 4.33
percent from 4.39 percent, with points increasing to 0.41

from 0.40 (including the origination fee) for 80 percent
loan-to-value (LTV) ratio loans. This is the lowest 30-year jumbo rate
since MBA started tracking the series in January 2011. The effective
rate also decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages
backed by the FHA decreased to 3.96 percent from 3.97 percent, with
points increasing to 0.61 from 0.57 (including the origination fee) for
80 percent loan-to-value (LTV) ratio loans. The effective rate also
increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages
decreased to 3.36 percent from 3.40 percent, with points increasing to
0.41 from 0.40 (including the origination fee) for 80 percent LTV loans.
The effective rate also decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.94
percent from 2.91 percent, with points decreasing to 0.39 from 0.41
(including the origination fee) for 80 percent loan-to-value (LTV) ratio
loans. The effective rate also increased from last week.

** Market News International Washington Bureau: 202-371-2121 **

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