Origination

Before implementation of the Consumer Financial Protection Bureau's qualified mortgage (QM) and ability-to-repay rules, many industry analysts expressed concerns over the ultimate impact of these rules on mortgage lending and access to credit. Now that the rules have been in effect several months, the debate over the impact of these rules has only intensified.

The total number of mortgage refinances in the United States experienced a slight increase in June, though activity for the quarter was down overall. The agency also reported a drop in refinances done through the government's Home Affordable Refinance Program, which accounted for an estimated 15.7 percent of refinances completed through Fannie Mae and Freddie Mac.

Average fixed mortgage rates drifted down again this week, sinking to their lowest level so far this year. Freddie Mac reported Thursday that the average fixed interest rate for a 30-year fixed-rate mortgage (FRM) was 4.10 percent (0.5 point) for the week ending August 21, down 2 basis points from last week's average. The previous 2014 low was 4.12 percent, first seen in late May and then again three more times throughout the summer.

The Mortgage Bankers Association (MBA) reported a 1.4 percent seasonally adjusted bump in application volumes for the week ending August 15, a partial reversal from the 2.7 percent decline reported the week prior. While last week's results were lifted by improvement in applications for conventional mortgages, they were also weighed down by a 5.9 percent decrease in applications for government mortgages.

Despite a slight easing in credit standards, the percentage of loan applications closed in July slipped to a three-month low, Ellie Mae reported Wednesday in its monthly Origination Insight Report. Tracking loan applications initiated 90 days prior, the company calculated an overall closing rate of 57.7 percent last month, down from 60.7 percent in June and 57.8 percent in May.

Based on data collected from April through June, Mortgage Daily reported a 24 percent quarterly increase in mortgage originations to an estimated $296 billion among all lenders as of June 30. Production still fell short 51 percent on an annual basis as consumer demand for mortgages remained anemic and credit standards stayed tight.

Seven months after the implementation of its ability-to-repay and qualified mortgage (QM) rules, the Consumer Financial Protection Bureau (CFPB) announced it is tweaking the loan thresholds used to determine the maximum points and fees for QM loans.

The Mortgage Bankers Association (MBA) estimates purchase applications for new homes nudged up 2 percent compared to June. The increase does not account for any typical seasonal patterns. Factoring in seasonal adjustments, MBA says July single-family new home sales ran at an annual rate of 433,000 homes, up from 386,000 in June, representing a 12.2 percent rise.

In a follow-up piece on the company's inaugural Mortgage Lender Sentiment Survey, Li-Ning Huang, senior manager of Economic and Strategic Research at Fannie Mae, found that most of the lenders surveyed don't plan to change their current strategy in response to January's regulatory changes, with 46 percent saying they plan to "wait and see" what happens in the market before acting.

The Mortgage Bankers Association (MBA) reported a 2.7 percent decrease in mortgage application volume from a week earlier in its Weekly Mortgage Applications Survey for the week ending August 8. Both the Refinance Index and the Purchase Index both fell to their lowest levels in months, dropping 4 percent and 1 percent, respectively.