Florida Mortgage Applications Rise; Analysts Skeptical

Florida mortgage applications rose for the second straight week, driven by both growing demand for refinancing and home purchase loans.

The Mortgage Bankers Association’s seasonally adjusted mortgage application index rose 3.4 percent in the week ended August 10 to 678.7.

That’s its highest level since the middle of May.

The rise of Florida mortgage loan application data seems to fly in the face of a spate of reports pointing to a crisis of confidence in the industry.

Potential borrowers may be filing multiple applications as more loans get rejected, distorting the total applications figures, analysts say.

“Recent upheavals in the industry may be temporarily increasing the level of retail application activity at the large lenders that participate in the MBA mortgage survey rather than representing a system-wide increase,” Doug Duncan, the MBA’s chief economist, said.

Rapidly rising defaults and foreclosures that emanated from the bad credit mortgage market have been seeping into higher-quality home loans.

Dozens of Florida mortgage lender troubles have been reported, many have shut their doors and almost all have tightened lending standards.

On the Florida mortgage refinance side, many borrowers continue to capitalize on relatively low loan rates - especially homeowners with adjustable-rate mortgages opting to switch into safer, fixed-rate mortgages.

Borrowing costs rose across the board last week, with 30-year loan rates up 0.04 percent to 6.45 percent.

These loans were slightly less compared to the year-ago rates of 6.54 percent. One-year adjustable-rate mortgage rates increased to 5.81 percent from 5.69 percent.

The purchase index rose 3.9 percent to 464.9 for the week ending August 10. The Florida refinancing gauge climbed 2.6 percent to 1,929.6 on a seasonally adjusted basis in the same week.

The overall mortgage application index and the data provided includes the purchase and Florida refinance subcomponent indexes.

SOURCE: Reuters