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Joel Lobb, a senior loan officer at Louisville, Ky.-based American Mortgage Solutions, said that in all his 18 years as a loan officer he’s never seen it this slow.
“Refinances are pretty much not existent in the loan pipeline anymore, with a lot of mortgage refi shops closing,” Lobb said.
But purchase loan demand has dried up, too, he said. After hitting a three-year peak in early May, purchase loan applications have dropped by 21 percent, according to MBA data.
In addition to elevated interest rates, Lobb said fewer people are seeking to purchase homes with mortgages or refinance because the Federal Housing Administration (FHA) has both increased the mortgage insurance premiums that it charges borrowers and tightened its underwriting requirements.
“Once you figure those premiums in, it is very costly to refinance or buy a home,” Lobb said of FHA insurance premiums. “The private mortgage insurance market is supposed to supplement the government-insured mortgage market, but it is still very restrictive with higher credit scores requirements usually being at least 660 or higher.”
- See more at: http://www.inman.com/2013/12/18/mortgage-applications-dive-to-lowest-level-in-over-12-years/#sthash.VG0qvl3T.dpuf