Refinancing activity increased slightly in the week ending Sept. 14 as new lows in mortgage rates were set.
The Mortgage Bankers Association (MBA) reported the Refinance Index increased 0.8% to 4765.3 with the average contract interest rate for 30-year fixed conforming loans at 3.72%, down three basis points from the prior week, while Federal Housing Administration rates held at a record low 3.50%.
Also a possible contributor to increased refinancing applications was the looming increase in g-fees that takes effect on Nov. 1 (cash loans) or Dec. 1 (loans exchanged for MBS) that will be passed through to borrowers.
In an update on Home Affordable Refinance Program (HARP) activity, the MBA said HARP 2.0 share was at 22.0% which is down slightly from 24% reported in its last update a few weeks ago.
As a result of the new rep and warrant framework that takes effect on January 1, 2013, HARP activity could see a pickup early next year. Changes to reps and warrants should reduce putback risk and give servicers more confidence to do HARP refinances, including via cross-servicing.
Meanwhile, the Purchase Index fell 3.8% to 185.7 with overall mortgage application activity easing 0.2%.