Mortgage Bankers Association Weekly Mortgage Applications Nov 28 2007

Investors trying to gauge the extent of the housing market’s slump will watch Wednesday for industry data on loan volumes.

The Mortgage Bankers Association will report its weekly index of home-loan application volume at 7 a.m. EST.

The index fell last week after rising the week before. For the week ending Nov. 16, the trade group’s seasonally adjusted index of mortgage application volume fell 3.6 percent to 681.7. Refinance volume fell 5 percent during the week, while purchase volume fell 2 percent.

A 681.7 reading means mortgage application activity is about 6.8 times higher than it was when the trade group started tracking the data in March 1990.

The index, which stood at 100 at its onset, is derived from a survey of major lenders representing about half of the U.S. mortgages made each week. It does not include loans originated by nonbank lenders.

The index has fluctuated this year after sinking in June 2006 to 529.6, its lowest level since 2002. At the height of the housing boom in May 2003, it peaked at 1,856.7.

The mortgage industry’s recent woes, which started with rising defaults among borrowers with weak credit and spread to better-quality loans, have shuttered dozens of lenders and led others to scale back their riskier loan operations.

Many lenders, including Countrywide Financial Corp., are instead focusing on mortgages that can be sold to Fannie Mae and Freddie Mac, the government-sponsored companies that package loans and sell them as bonds.

But dismal earnings reports from both Freddie and Fannie have investors worried that their loan purchasing power may wane, which would dramatically worsen the business climate for mortgage lenders.

Ahead of the Bell: Mortgage Applications
The Associated Press