The Mortgage Bankers Association (MBA) reported today, that total mortgage applications spiked 48% last week following the Federal Reserve's move to cut short term interest.
The index that tracks refinance application actually went up 82.2%, while purchase loans were up 10.6%
What I'd like to know is what percent are FHA loans. The reason for this is the FHA loans are going to be able to help out those behind on their current mortgage payments. While conventional loans aren't going to be able to help those currently in trouble.
One of two things are happening, either many people with mortgages in distress are refinancing to better loans (FHA increased loan limits, and easier qualifying with lower credit scores) OR, there are a lot of people, who are not currently in fear of losing their home, refinancing and taking advantage of the lower interest rates.
So, the take away is this. Through all the efforts of the Federal Government to stem the foreclosure tide, is it working? Well, if people are in fact able to refi, and get current on mortgages then, Yes.
My guess: It's probably still too early to tell.
What do you think?
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