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do mortgage application stats exclude multiple submissions?

snigletsniglet
edited September 2007 in Housing Bubble
Does anyone know if the statistics reported on the number of mortgage applications subtracts duplicate filings? I've heard a lot about how many buyers have to make numerous applications these days to find a lender these days (i.e. since standards have tightened). Would all these filing attempts (for the same buyer) inflate the over-all statistic that is reported?

I've also wondered who exactly is surveyed to collect the data for this statistic. Is it just banks? Or do they include a representative sample of mortgage brokers? If they only look at banks, they might get a very skewed view of what is happening. In fact, banks could be seeing their volume of loans go up even as mortgage total volume is down, simply because the lenders who depend on securitization are dead in the water.

http://www.reuters.com/article/economicNews/idUSNAT00313020070905

Comments

  • bilirubenbiliruben
    Mortgage Applications Data Useless:
    Why has the relationship between purchase applications and home sales weakened recently? One likely explanation is that the stricter guidance of depository institution regulators over the past year with respect to mortgage loans has made it more difficult for some households to qualify for a loan. As a result, those households have had to make multiple applications in order to get a mortgage loan -- thereby pushing up purchase applications without increasing home sales.
    Another reason for the breakdown in correlation between applications and sales is how the MBA survey is conducted. According to the MBA:

    The survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

    Since many smaller lenders have closed shop (see the Implode-O-Meter), more potential buyers may be applying for loans from the lenders covered by the MBA survey. As an example, suppose 1000 people applied for loans in a given week from 10 lenders.

    Lender 1: 250
    Lender 2: 150
    Lender 3: 100
    Lender 4-10: remaining 500 applications.

    The MBA survey covers "approximately 50 percent of all U.S. retail residential mortgage originations", so in this example the MBA would only need to survey the top 3 lenders. Now if lender 10 closed shop (with 50 applicants), and the applicants all applied in equal proportions to the other lenders, the MBA index would increase 5% without any increase in overall activity.
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