Mortgage applications plummeted 27.6 percent on a seasonally adjusted basis for the week that ended Friday from the previous week, the Mortgage Bankers Association said Wednesday.
The drop comes as no surprise, given the 25.5 percent jump the week before, just ahead of the implementation of new mortgage disclosure rules (which go by the acronym TRID). Lenders had to make major changes to their loan processing systems, and the fear was that this would slow applications; borrowers, therefore, rushed to get applications in before the rules went into effect on Oct. 3.
"The prior week's results evidently pulled forward much of the volume that would have more naturally taken place into this week," said Michael Fratantoni, the association's chief economist. "Purchase volume for the week was below last year's pace, the first year-over-year decrease since February 2015, while refinance volume dropped sharply even with little change in mortgage rates."