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Mortgage applications experienced a dramatic increase this week just before the TILA-RESPA Integrated Disclosed Rule (TRID) was put into effect on October 3rd.
As buyers and originators rushed to beat the TRID rule implementation and interest rates experienced renewed volatility, mortgage application increased 25.5 percent on a seasonally adjusted basis for the week ending October 2, 2015.
According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey, on an unadjusted basis, the index rose 26 percent from one week prior.
The Refinance Index increased 24 percent from the previous week. Meanwhile, the seasonally adjusted and unadjusted Purchase Index increased 27 percent from one week earlier. The unadjusted Purchase Index was also 49 percent higher than the same week one year ago.
"The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and as many applications were filed prior to the TILA-RESPA regulatory change," said Lynn Fisher, MBA's VP of Research and Economics.
On October 3rd, the mortgage industry was hit with huge regulatory changes that would affect the loan origination process. Many organizations called for a "hold-harmless" grace period for those that are attempting to comply with the new rules.
The House of Representatives is set to vote on a bill that will provide a hold harmless grace period for TRID on Wednesday. House Majority Leader Kevin McCarthy recently released a statement announcing that the House will vote on the Homebuyers Assistance Act next week for those putting forth effort to comply with TRID.
"This bipartisan bill provides certainty to businesses that are trying to comply with the rule as well as an opportunity to work out any implementation issues that come up," McCarthy said. "There is no reason that CFPB regulations should prevent homebuyers from being able to buy and close on a home."
Fisher also added that the average loan size of applications in the weekly survey increased by 6.9 percent, driven by a 12.1 percent increase in the average size of refinances.
MBA also reported, the refinance share of activity fell from 58.0 percent to 57.4 percent this week, while the adjustable-rate mortgage (ARM) share of activity increased to 7.6 percent of total applications.
The FHA share of total applications declined from 13.8 percent to 12.7 this week. The VA share of total applications decreased to 9.2 percent from 10.3 percent the week prior. The USDA share of applications remained at 0.7 percent, the same as last week.
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