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Logan Mohtashami says

"We expect that application volume will remain volatile over the next few weeks as the industry continues to implement TILA-RESPA integrated disclosures," said Mike Fratantoni, the MBA's chief economist, referring to the the Truth in Lending Act and the Real Estate Settlement Procedures Act of 1974.

Why would integrating disclosures create application volatility? They are just a bunch of disclosures that no one reads, but everyone signs.

Hey Logan......((Wed, 21 Oct 2015, 4:25am PDT ))

You are in the Pacific time zone, not the Eastern time zone. It's OK to get some sleep.

Strategist says

Hey Logan......((Wed, 21 Oct 2015, 4:25am PDT ))

You are in the Pacific time zone, not the Eastern time zone. It's OK to get some sleep.

Mortgage purchase application data comes out at 4:00

Strategist says

Why would integrating disclosures create application volatility? They are just a bunch of disclosures that no one reads, but everyone signs

What happened was that everyone and anyone that had a deal coming up in 30-60 days got their applications signed before the October 3rd date for TRID.

If you did that then you're not on the Hook for the new regulations. So, there are possible delays and even a subject loan decline at closing due to this new regulation.

So, if you had anything in the pipeline you made sure to get the application in.

Hence the biggest jump in history for the month of October with the biggest decline in history in October as well, most of the action happened in that 2 week time frame due to the massive jump the week before TRID.

I was drinking the koolaid right up to the last two syllables....

Logan Mohtashami says

Have to remember this is for existing homes, forward demand curve of 30-60 days on closing, which means you might see another negative week because it's been a 3 week period and deviation take off happened in a 1 week data line set.

So, normally would say 2 week because the 2nd week was much lower than the uptick, but since it's October you could have maybe 1 or 2 more negative data spreads, maybe.

SoftShell says

So, normally would say 2 week because the 2nd week was much lower than the uptick, but since it's October you could have maybe 1 or 2 more negative data spreads, maybe.

It's week 3 now, still working off the TRID run up and run down, purchase applications have been trending above 10% for months now

This week 9% YoY
Last week -1% YoY
First Week 49% YoY

Best example for the TRID impact is really this chart.

No time ever in U.S. economic history we have had a spike in the month of October this big since the day has been kept, this was the week where you had to get the applications in before the TRID deadline

This was the 49 percent year over year increase in the data

Once that impact was in the system, then we had a negative year over year print in applications which is not the norm as we have been posting positive YoY prints all year long and a lot 15%-20% numbers

Strategist says

People have to live somewhere. Every single day the home shortage is getting worse

Here is a chart of both for you S, Permits and Starts adjusting to population, this can easily been shown as a bullish chart for forward demand because it's simply so low

Better chart to show TRID

You are the chart guru here Logan.

Logan Mohtashami says

So, there are possible delays and even a subject loan decline at closing due to this new regulation.

What kind of delays? And how is TRID more likely to have a possible loan decline at closing?

Indiana Jones says

What kind of delays? And how is TRID more likely to have a possible loan decline at closing?

I don't find TRID a big deal, but as always the industry will complain about any new regulation.

It's more paperwork and it's coming at closing now as much as in the start of the deal. I look at it as a double disclosure process and the closing disclosure must be received by the borrower or nothing gets done. Some lenders have a final C.D. can't be a penny different than disclosed, if something isn't correct at that stage they will cancel the loan and you have to start over again.

After a few months everyone will have a rhythm with the disclosure process and this will be forgotten

As you can see here, everyone wanted to avoid this, since it's October it's not that big of deal because it's not a heat month, but you can see in the data everyone wanted to get their October and November closing in before the TRID deadline. Look for mid November or December closing to see if any issues come about

Logan Mohtashami says

Strategist says

People have to live somewhere. Every single day the home shortage is getting worse

Here is a chart of both for you S, Permits and Starts adjusting to population, this can easily been shown as a bullish chart for forward demand because it's simply so low

The longer it takes to catch up, the greater will be the price explosion.

Strategist says

The longer it takes to catch up, the greater will be the price explosion.

It's not that easy! :-)

Look for a beat in existing home sales tomorrow, the last number was a bit too negative, trend wasn't that bad

Strategist says

People have to live somewhere. Every single day the home shortage is getting worse

They interviewed the Chief Economist of NAR & Redfin and myself on housing going into the fall

Low inventory is only in context that it's really not that low compared to the years 1999-2005, Hence why housing starts have legs on both fronts, however, it's a slow and steady move due to the price inflation factor model

http://www.abqjournal.com/663841/biz/real-estate/what-to-expect-from-the-housing-market-this-fall.html

Nice article. That was pretty good.
It seems tight mortgage requirements have loosened only a little bit.

"– Credit standards may begin loosening: Lending standards will loosen but will do so at a “glacial pace,” Yun said.

“Those people who are getting approved (for) mortgages, their credit scores have been exceptionally high, but now (they) may begin to slide down,” he said.

Richardson agreed. She doesn’t expect credit standards to significantly loosen until 2016.

“Even (for) FHA loans, if you have something lower than a 680 credit score, you still don’t see a lot of mortgages being originated to the lower end of the credit spectrum.”

Mortgage credit availability has increased, meaning that lending standards have somewhat loosened for most of 2015, according to the Mortgage Bankers Association’s Mortgage Credit Availability Index."

Strategist says

"– Credit standards may begin loosening: Lending standards will loosen but will do so at a “glacial pace,” Yun said.

Can't ease much from easy to start off

Strategist says

“Those people who are getting approved (for) mortgages, their credit scores have been exceptionally high, but now (they) may begin to slide down,” he said.

This right is what I tell people is the single worst housing economic thesis ever in this cycle

- Poor fico score Americans have cash flow problems, they're struggling to pay rent outside of debt obligation, of course they aren't buying homes in this cycle without exotic sub prime financing

I have certain data points and financial information I show people on how silly this argument was, it was my main take against Mark Zandi and why I knew he never had any financial lending background when he was shocked that high fico score Americans were buying in this cycle

Strategist says

“Even (for) FHA loans, if you have something lower than a 680 credit score, you still don’t see a lot of mortgages being originated to the lower end of the credit spectrum.”

Another Lie, FICO scores can go as low as 560, but if you're under 660 as a middle fico score, you have cash flow problems, which means most likely you're struggling with rent.

Strategist says

Mortgage credit availability has increased, meaning that lending standards have somewhat loosened for most of 2015, according to the Mortgage Bankers Association’s Mortgage Credit Availability Index."

Only on marginal items, over lays that only impact a very small group of people.

The easing of lending standards that you want for housing would need congressional approval and a repeal of Dodd Frank and CFPB, not going to happen

Ironman says

I heard this morning, last month was revised down 5% and this month it was up 4.7%...

Last month was down almost 5% it was a deep miss, today's number was just back to trend, it was an odd miss last month.

Here is chart for existing homes and mind the headline number is soft even with a heavy cash buyer presence

Why are they moving up if they can't afford it?

FortWayne says

Why are they moving up if they can't afford it?

They can afford it, it's just that in this cycle, it's just the volume of that group wasn't as big as many have thought.

All my primary resident buyers this year are move up buyers

If we take just the extra cash buyers out of the equation, not all of them, basically housing demand is really not that much higher than the great recession lows

Strategist says

Sandbagging. I would just average the 2 data points.

Now we finally got TRID out of the system

Even though purchase applications were down 3% weekly, the YoY print is at 23%, we were trending 15%-20% YoY before TRID, last week's 8.9% YoY was too soft to pre TRID trend

Now we are back to Pre Trid Levels YoY