Mortgage Applications Climb Despite Government Uncertainty

Mortgage Applications Climb Despite Government Uncertainty

While the government shutdown certainly has impacted various aspects of home buying activity, mortgage applications in the United States have still managed to climb higher as rates dipped to their lowest level in months.According to the latest report from the Mortgage Bankers Association, for the week ending October 4, loan applications increased 1.3 percent on a seasonally adjusted basis from one week earlier — only the sixth gain in 22 weeks. The figure includes both refinancing and home purchase demand and covers more than 75 percent of all domestic retail residential mortgage applications.Additionally, the MBA’s refinance index increased three percent from a week earlier and is at its highest level since the beginning of August. Overall, the refinance share of mortgage activity accounted for 64 percent of total applications, which is one percent higher from a week earlier and seven percent above its lowest level since April 2010.In the wake of the shutdown, mortgage investors Fannie Mae and Freddie Mac have temporarily relaxed the rules that borrowers must have their incomes verified by the Internal Revenue Service. This verification requirement proved to be problematic because most IRS functions have been suspended during the federal government shutdown.In a recently released bulletin, spokespersons for Freddie Mac said the agency is temporarily relaxing the IRS income verification requirement, although incomes will still need to be verified once the government shutdown ends. The agency also said it will continue to purchase mortgages issued to federal government workers or others whose paychecks have been suspended because of the shutdown. Additionally, lenders that sell their mortgages to Fannie and Freddie can now issue loans to homebuyers without waiting for the IRS to reopen, as long as the borrowers make good-faith efforts to show their incomes with copies of tax returns or by signing affidavits.



Carla Winter - Raymond Selix Headshot
Author:
Phone: 303-523-1921
Dated: October 25th 2013
Views: 1,774
About Carla Winter -: Ray and Carla have been working as a team since 1995. Carla’s extensive knowledge of the Denver a...

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