Mortgage Applications Near Flat as Purchase Demand Falls

Applications for U.S. home loans rose slightly in the latest week as increased refinancing activity offset a decline in demand for purchase loans as the U.S. government shutdown weighed, data from an industry group showed Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 0.3 percent in the week ended Oct. 11. That follows a gain of 1.3 percent in the week ended Oct. 4.

The figures come as the U.S. federal government shutdown has cast a spotlight on fiscal policy, with some economists worrying that the stalemate in Congress could drag on the economy.

That shutdown affected the mortgage market, MBA said.


"Purchase applications for government programs dropped by more than 7 percent over the week to their lowest level since December 2007, and the government share of purchase applications dropped to its lowest level in almost three years," Mike Fratantoni, MBA's vice president of research and economics, said in a statement.

MBA data showed 30-year mortgage rates edged up 4 basis points to 4.46 percent, but rates were still down from September when they matched the 4.8 percent high for 2013.

The refinancing index gained 3.3 percent after recently hitting the lowest level since June 2009. In contrast, the gauge of loan requests for home purchases, a leading indicator of home sales, fell 4.8 percent.

The mortgage survey covers more than 75 percent of U.S. retail residential mortgage applications, according to MBA.

source: dailyfinance.com

Fewer U.S. Homes Entered Foreclosure Track in 3Q

LOS ANGELES -- The number of U.S. homes set on the path to foreclosure slid to a seven-year low in the third quarter, reflecting a gradually improving housing market and fewer homeowners falling behind on mortgage payments.

Lenders initiated foreclosure action on 174,366 homes in the July-September period, the lowest level since the second quarter of 2006, foreclosure listing firm RealtyTrac Inc. said Thursday.

Foreclosure starts declined 13 percent from the previous quarter and were down 39 percent from the third quarter last year, the firm said.

The national slowdown in foreclosure starts comes as the U.S. housing market continues to recover from a deep slump, a rebound driven by rising home prices, steady job growth and fewer troubled loans dating back to the housing bubble days. Fewer homes entering the foreclosure pipeline should translate into fewer properties that eventually end up lost to foreclosure.

"It's looking really good that there are not more coming into the pipeline," said Daren Blomquist, a vice president at RealtyTrac. "Barring any other economic shock to the system, we expect that to bode well going forward."



Foreclosure starts fell on an annual basis in the third quarter in 38 states, including Colorado, Arizona, California and Illinois. They increased from a year earlier in 11 states, including Maryland, Oregon, New Jersey and Connecticut.

While fewer homes are entering the foreclosure process, lenders stepped up home repossessions, which led to a quarterly increase in homes lost to foreclosure.

Completed foreclosures rose 7 percent in the third quarter versus the April-June period, the firm said. Completed foreclosures were down 24 percent from the third quarter last year, however.

All told, 119,485 homes were taken back by lenders in the July-September quarter. That puts the nation on pace to end this year with roughly 507,497 completed foreclosures, or down about 24 percent from 2012's total.

Foreclosures peaked in 2010 at 1.05 million and have been declining ever since.

The number of homes taken back by banks in the third quarter climbed from the previous quarter in 26 states, including New York, New Jersey, Illinois and Virginia, RealtyTrac said.

Much of the quarterly increase in foreclosures came about in states where courts oversee the foreclosure process. Those courts were backed up with cases two years ago, but have been making progress working through their backlog.

Even so, it's taking longer for homes in many states to complete the foreclosure process.

In the third quarter, it took an average of 551 days, or 1.5 years, for a U.S. home to move from initial default status to ultimately being repossessed by the lender, the firm said.

That's up from an average of 526 days in the second quarter and an increase from 382 days in the third quarter of last year.

"It's a sign that we're still dealing with the wreckage of the last housing bust," Blomquist said.

In New York, it took an average of 1,037 days, or nearly three years, for the foreclosure process to run its course in the third quarter, the longest of any state. Maine clocked the shortest average time to foreclose at 160 days.

The impact of foreclosures remains sharply elevated in some states. Florida topped the nation with a foreclosure rate of more than twice the national average in the third quarter.

Rounding out the top 10 states with the highest foreclosure rates in the July-September period were: Nevada, Maryland, Illinois, Ohio, Connecticut, Delaware, New Jersey, Indiana and South Carolina.

source: dailyfinance.com