Another report of new lows in mortgage rates led to a 22% surge in the MBA's Refi Index to ~5331 for the week ending July 13, just under its mid-June high since April 2009 of 5386. As a percent of total application activity, refinancing share rose to 80.1% from 77% in the prior report.

“Applications for HARP refinance loans accounted for 24 percent of refinance activity last week, in line with the HARP share for the past few weeks.”  said Mortgage Bankers Association Vice President of Research and Economics Michael Fratantoni. This statement suggests that Home Affordable Refinance Program (HARP)-related refinancings are near peak levels and stabilizing.

Activity for this report will likely begin showing in the August prepayment report, which will be released in September. At this time, speeds are expected to be around 5% higher on average from July's estimate with increases across the stack in conventionals with a higher number of collections at 23 from 21.

Meanwhile, September is seen falling around 10%-15% with lower coupons slowing a bit more than HARP cohorts, in part, as the day count drops to 19.

It appears that HARP coupon speeds are nearing their peaks. However, JPMorgan Securities analysts said they expect speeds will hover around these levels through the end of the year as some of the small-to-mid-sized lenders, not to mention Bank of America, are still ramping up their HARP programs.

According to the MBA's weekly report, the contract interest rate for 30-year fixed conforming loans averaged 3.74% compared to 3.79% in the last report. The Federal Housing Administration rate declined eight basis points to 3.55%. Both set new record lows for the survey's history.

The Purchase Index was little changed at 192, while overall mortgage application activity jumped 16.9%.

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