Industry NewsMortgage

Slide in rates sparks new refi boom

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Five weeks of declining mortgage rates have spurred another refinancing boom, but demand for purchase mortgages sagged last week after a temporary surge of homebuyers rushing to beat stricter FHA standards.For the week ending Oct. 8, demand for purchase loans was down 8.5 percent from the week before and 37.1 percent from the same time a year ago, the Mortgage Bankers Association said in releasing the results of its Weekly Mortgage Applications Survey.A week before, demand for FHA-backed loans had surged 17.2 percent, as homebuyers rushed to get their loan applications in before new credit score and downpayment requirements kicked in on Oct. 4.Under changes announced in July, borrowers now need a FICO score of at least 580 in order to purchase a home with the minimum 3.5 percent downpayment. Borrowers with scores between 500-579 need downpayments of at least 10 percent, and those with scores below 500 won't qualify for the program, HUD said in a Sept. 3 letter to lenders.Increased dema...