Mortgage Applications Climbed For a Third Week

Applications for mortgages has increased for a third straight week as borrowers are trying to refinance loans that are set to adjust. The Mortgage Bankers Association stated that they’re up 4.6 percent which brings applications to 1,962. This is the highest level they have been at since May 18th. The Mortgage Bankers Association also stated that purchase applications raised slightly to .9 percent higher than last week. The Mortgage Bankers Association stated that refinances accounted for 43.5 percent of all applications last week, which is up from 42.1 percent.

This raise in refinances has been the result of the rising concern that these rate resets will boost delinquencies and foreclosures. It is estimated that over 5 million adjustable-rate mortgages are set to reset to higher rates over the next 18 months. However, many of these applications are being turned down with lenders removing programs that once accepted riskier borrowers, and increased the credit requirements of other loans. A survey by Campbell Communications earlier this month found that 57 percent of borrowers trying to refinance their loans in August were turned down.