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Mortgage Applications Surge Forward by 10.3%

More refinance loan applications inspired a 10.3-percent leap forward in mortgage applications last week, according to the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA).

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The MBA released a weekly survey responsible for tracking mortgage application volume.

The trade group's Market Composite Index recorded a seasonally adjusted 10.3-percent uptick from the week earlier, while loan volume went up 9.9 percent on a seasonally unadjusted basis from the week earlier.

The Refinance Index offered up a 12.1-percent surge in loan application volume, as the Purchase Index similarly noted an increase along the lines of 2.7 percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a contrast with figures from last week but still lower than the same week seen last year.

""As has been the case all year, many refinance applicants are opting to deleverage by choosing 15-year mortgages,""

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""Mike Fratantoni"":http://www.mortgagebankers.org/NewsandMedia/PressCenter/78422.htm, MBA's VP of research and economics, said in a ""statement"":http://www.mortgagebankers.org/NewsandMedia/PressCenter/78422.htm.

Also on a seasonally adjusted basis, the four-week moving average fell by 0.37 percent but went up by 0.89 percent on a seasonally adjusted basis for the Purchase Index.

The refinance share of activity shot up by 78.6 percent in total application volume, an increase from 77.1 percent from the week before, while adjustable-rate mortgages (ARMs) remained unchanged from last week.

The surge in mortgage loan application volume follows a shortfall in contract interest rates on average for fixed-rate mortgages, with the 30-year loan seeing a drop from 4.31 percent the week before to 4.22 percent last week.

The same for the 15-year loan fell from 3.63 percent to 3.54 percent, while interest rates for 5-year and 1-year ARMs declined from 3.09 percent to 3.01 percent last week.

""Treasury rates dropped last week, as renewed turmoil in Europe once again led to a flight to quality, and 30-year mortgage rates dropped to their second lowest level of the year,"" Fratantoni added. ""Refinance applications jumped more than 12 percent to their highest level in a month and some lenders experienced even larger increases.

Trouble in Europe reached a boiling point last week when Greek Prime Minister George Papandreou announced his resignation following a ratification by his parliament of a bailout package worth trillions of euros.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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