Sign of Home Buying ‘Rebounding Soon’

After several recent drops, mortgage applications reversed course last week, with those for home purchases jumping 5 percent on a seasonally adjusted basis, according to the Mortgage Bankers Association’s latest report. The rise, which reflects data from the week ending Feb. 20, also came despite higher mortgage interest rates, MBA notes. (The survey includes adjustments for the President’s Day holiday.) Nevertheless, purchase applications still remain 2 percent lower than the same week a year ago.

Applications for refinancings continued to fall last week, dropping 8 percent to its lowest level this year. The drop prompted MBA’s overall mortgage application index, reflects both applications for home purchases and refinancings, to fall 3.5 percent for the week.

“The one exception to this trend was VA refinance volume, which increased 27 percent last week as certain lenders refocused on VA production,” says Mike Fratantoni, MBA’s chief economist. “The VA share of total applications increased to 9.6 percent from 8 percent the week prior as a result.”

Source: “Mortgage Applications Point to More Buyers,” CNBC (Feb. 25, 2015)

Lenders Step Up to Help Veterans Buy Homes

Big banks and mortgage companies are stepping up efforts to help returning vets get affordable housing by advertising the benefits of VA loans as well as donating hundreds of homes mortgage-free to vets.

The Department of Veterans Affairs’ home loan program has soared to record levels, issuing new mortgages at more than double the pace of 2007.  VA-backed mortgages represent about 7 percent of total home-purchase mortgage activity now, up from about 3 percent in 2011, according statistics from the Mortgage Bankers Association. VA-guaranteed mortgages come with zero down payment and flexible credit underwriting. The interest rates are competitive too.

“In an era of extremely tight credit and underwriting in most segments of the marketplace, the VA program looks like an extended hand for creditworthy vets who don’t have large amounts of money to put down on a home purchase or are transitioning into regular employment in the mainstream economy,” the Los Angeles Times notes.

Source: “VA, Lenders, and Nonprofits Mobilize to Help Veterans on the Home Front,” Los Angeles Times (Oct. 26, 2014)