Mortgage applications down, home-equity credit delinquencies up

Surveys released today showed that fewer Americans applied for mortgages last week and more were missing payments on their home equity lines of credit.

The Mortgage Bankers Assn. said applications for new home loans fell 8.2% for the week ending last Friday, with a slight increase in interest rates for 30-year fixed mortgages reining in the breakneck refinance market. The refinance share of mortgage activity dropped from 82.9% to 79.8% of total applications, according to the MBA report this morning.

From the report:         

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.07% from 5.03% percent, with points decreasing to 1.16 from 1.24 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.67% from 4.79% percent, with points decreasing to 1.16 from 1.26 (including the origination fee) for 80% LTV loans.

The average contract interest rate for one-year ARMs decreased to 5.90% from 6.15%, with points decreasing to 0.31 from 0.44 (including the origination fee) for 80% LTV loans.

Also this morning, the American Bankers Assn. said record numbers of borrowers had missed payments on home equity lines of credit during the third quarter.

The trade group's latest report on late payments for consumer loans said delinquencies on car loans that banks made indirectly through auto dealers also were at the highest levels it had ever recorded.

By contrast, consumers were missing fewer payments on credit cards, the ABA said. A quote from the trade group's economist James Chesen:

While some people are relying on credit cards to meet daily expenses like food and gas, many are being careful not to add new debt.

-- E. Scott Reckard

Photo: Lenders and HUD-certified counselors meet with homeowners at a foreclosure prevention counseling fair at Crenshaw Christian Center in Los Angeles on Dec. 6. Credit: David McNew / Getty Images

Comments

[MyLessThanPrimeBeef]

People want to know how to stop this housing meltdown. And we understand that the incoming regime is already talking about giving money back to the taxpayers.

Since we are not a banana republic, we don't arbitarily delete a few zeros off our currency. No, we are too good for that.

Instead, I propose we do the opposite - we add a few zeros to our currency. It's far better than tax rebates or tax credits. That $200,000 you have under your mattress will suddenly be worth $20,000,000.

Imagine that!

Not only will this encourage consumption, as people who save responsibly can easily become The Gloved One's $100K per month neighbors and the out of reach Westside houses are suddenly very affordable for the responsible savers, but this is in fact the only proposal I know that actually honors, yes, you read that right, honors responsible savers, instead of raping them with such menacing weapons as zero percent money market accounts that are being offered these days, simply to pander to the profligating debtors.

Lest people think I am a communist or foreign oilman, let me make it very clear that we limit this great idea to only reponsible American savers.

Sincerely,

The American Responsible Savers Society (ARSS)

PS: Please do not confuse us with The American Savers Society. We are not the same.

[LA-renter]

Once again, Mylessthanprimebeef, you are off topic.

Scott, please filter these posts.

Let's keep our eyes on target. Stop wandering off with silly thoughts.

We are living through a critical moment in our nation's history... We are trying to save our debtor lifestyle, the debt that makes us American. If you want to save your money, pinko-saver, move to China!

We need bright minds to show us how to continue spending, spending, spending in the face of an overwelming credit crisis. Too many Americans are having trouble getting the money they desparately need, desire, expect...