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The Government Hyping Mortgage Application Data? You Won’t Believe This!

Posted on | January 7, 2009 | 6 Comments

Over the last three weeks, there has been major hype about the next refi-boom because mortgage applications are up, up and up!  Several news sources have posted that mortgage applications have been up 48%, 28.3% and even 155%!  Where are they getting the numbers you may ask.  Well, the government is reporting that mortgage applications are up but what they are not telling you is….

…that the overall number of applications may be up but many of these are multiple applications from the same borrower.  With rates being advertised at levels under 5%, any financially smart homeowner would apply to several different lenders to use quotes as a form of leverage.  It is obvious that borrowers are going to switch to different financial institutes to find the best rates.  Some individual homeowners have five or six applications out at this time, inflating the numbers.

…that the reports are only from the top 10 lenders in the United States.  While this may seem accurate think again as it is a reality that MANY of the smaller lenders cease to exist anymore as the mortgage crisis put them under.  It seems logical that the number of applications to the 10 largest lenders would increase as borrowers have fewer options as all the smaller financial institutes have had to close their doors in the last 12 months. 

…that only 35-45% of applications are actually getting accepted and funded in the current economic environment.  During the true refi boom of 2003, over 70% of applications were funded; today that number is halved.  If half the applications are actually receiving money, of course people are going to continue to apply to other lenders in hopes of getting that low rate; also inflating the number of mortgage applications.

So, in essence, the numbers that the government is feeding the public makes it sound like we are in the early stages of a housing bull market, but don’t believe the hype just yet.  The unemployment rate is still rising so where is the money coming from to fund these houses, 401(k) accounts?  Right!

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Comments

6 Responses to “The Government Hyping Mortgage Application Data? You Won’t Believe This!”

  1. Pat Eisenhauer
    January 7th, 2009 @ 7:41 pm

    Right on! These statistics are so far off it isn’t funny. Also interest rates have little to do with the actual costs involved. More and more banks and lending institutions are charging origination fees again and underwriting fees and other “junk” fees to off set the lower rates AND your home buyer will be paying interest for the life of the loan if these fees are “rolled into” the mortgage!

  2. Peter Hansen
    January 8th, 2009 @ 3:08 pm

    No matter how much money the Government gives thr Mortgage Banks they will not help the people who need help with their mortages. Bankers are not your friends they are in it for the money and to help thereselves. When the government learns this maybe they will learn that help starts at the bottem not at the top. Even in midevil days that was the way the higher power kept its power by collecting taxes from the poor. I can’t see our government helping only itself no matter who is president. I thought Obama was different but look who he hires to do his dirty work the same ones who were there before. Until you close down Washington and find a new Government in a different area and get rid of all who relie on our money to support themselves the hell with us./

  3. dave c
    January 8th, 2009 @ 3:23 pm

    The problem is jobs.

    The corporate media is trying as hard as they can to convince everyone it is anything but the lose of jobs to third world countries by corporations to get around every single law on the books in The United States of America.

    No matter what happens now it will eventually get to everyone that only legislation to stop corporations from doing what is best for the corporations which is off shoring every job and importing as many illegal and legal workers(visa’s and students)will stop the mess this country is getting into.

    We are only at the beginning. It can only get worse. Mortgage applications will only get more as people try last ditch efforts to save money and their homes.

    So when we see legislation to stop the off shoring of jobs then we will see things get better.

    When we see legislation to force corporations to follow the laws of the United States of America no matter were they produce the goods, then things will get better.

    Until then get ready to compete with people who have no homes or food or rights.

    Or worse get ready to be treated like the people in war zones.

    What happens to your neighbor happens to you! You are your brothers keeper.

  4. Subprime Blogger » The “Great Refi Boom” of 2009? A Must Read!
    January 8th, 2009 @ 8:41 pm

    [...] it is just not true.  The mortgage application data is greatly swayed as described in the article The Government Hyping Mortgage Application Data?  You Won’t Believe This!  Even if the application data was an accurate depiction of the current housing market, many of [...]

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    January 14th, 2009 @ 3:15 pm

    [...] The Government Hyping Mortgage Application Data?  You Won’t Believe This! [...]

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    January 17th, 2009 @ 10:15 am

    [...] The Government Hyping Mortgage Application Data?  You Won’t Believe This [...]

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