Industry NewsMortgage

Falling mortgage rates spur refis

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Mortgage applications surged last week as borrowers moved refinance their loans to take advantage of lower interest rates, which continued to fall this week as turmoil in financial markets prompted investors to seek safer investments.Mortgage loan applications were up a seasonally adjusted 33.4 percent from a week ago for the week ending Sept. 12, the Mortgage Bankers Association said, driven by an 88.1 percent surge in refinance applications. An index tracking purchase loans rose a more modest 2.4 percent, driven by a 5.3 percent increase in applications for conventional purchase loans. Applications for government backed purchase loans, largely FHA, fell 4.5 percent. The government's pledge to backstop mortgage financiers Fannie Mae and Freddie Mac and stand behind their debt provides reassurance to investors that the mortgage-backed securities issued by the companies are relatively safe investments."The drop in mortgage rates reflected the Treasury’s announcement that Fannie M...