Mortgage Bankers Weekly Update: Mortgage Refinance Applications Increase

Mortgage Bankers Association for the week of 07/07/2010

Market Composite Index: (loan
application volume) increased 6.7 percent on a seasonally adjusted basis
from one week earlier. On an unadjusted basis, the Index increased 6.5
percent compared with the previous week.

Refinance Index: increased 9.2 percent from the previous week and is the highest Refinance Index observed in the survey since the week ending May
15, 2009

Purchase Index: has decreased eight of the last nine weeks

Refinance Share of Mortgage Activity:
increased to 78.7 percent of total applications from 76.8 percent the
previous week, which is the highest refinance share observed in the
survey since April 2009.

Arm Share: increased to 5.4
percent from 4.7 percent of total applications from the previous week.

MBA outlook: (Excerpted from

Mortgage rates remained near record lows last week, as incoming data on
the job and housing markets were weaker than anticipated. As more
homeowners locked in to these low rates, the level of refinance
applications increased to a new 13-month high, said Michael Fratantoni,
MBAs Vice President of Research and Economics. For the month of June,
purchase applications declined almost 15% relative to the prior month,
and were down more than 30% compared to April, the last month in which
buyers were eligible for the tax credit.

We predict that mortgage originations will fall to $1.4 trillion in 2010
from an estimated $2.1 trillion in 2009. Purchase originations will
fall slightly to $725 billion, as home prices continue to fall and the
effect from the homebuyer tax credits wane. Refinance originations will
fall to $717 billion in 2010 from $1.4 trillion in 2009, but we continue
to mark up our refinance origination forecast given the sharp drop in
mortgage rates.

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