NEW YORK (Reuters) - U.S. mortgage application activity jumped to its highest level in eight months last week due to lower mortgage rates and a rush of borrowers to file before a change on loan disclosure, data from a mortgage industry group released on Wednesday showed.
The Mortgage Bankers Association said its index on mortgage application volume in the week ended Oct. 2 rose to 534.2, up 25.5 percent from the previous week.
MBA’s gauges on applications to refinance and to buy a home rose by a similar increment from the prior week.
The surge in applications came ahead of a mortgage rule that went into effect last Saturday.
The change from the federal Consumer Financial Protection Bureau entails replacement of two disclosure documents with two new forms. The rule is known as the TILA-RESPA Integrated Disclosures rule also known as TRID.
“The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and as many applications were filed prior to the TILA-RESPA regulatory change,” Lynn Fisher, MBA’s vice president of research and economics said in a statement.
One of the new forms is a loan estimate given to consumers within three business days after submitting a loan application.
The second form provides information to help consumers understand all of the costs of the transaction, which is to be given three business days before closing.
Meanwhile, the interest rate on 30-year fixed-rate mortgages, the most widely held type of U.S. home loan, averaged 3.99 percent in the latest week.
The average 30-year mortgage rate was down from 4.08 percent in the prior week and the lowest in five months.
Mortgage rates fell last week with a decline in longer-dated U.S. Treasuries yields as signs of a weakening global economy raised bets the U.S. Federal Reserve may delay a possible interest rate increase later this year into 2016.
Benchmark 10-year Treasuries yield fell near 1.90 percent last Friday, which was the lowest level since April, following a disappointing September payrolls report.
Reporting by Richard Leong; Editing by Bernard Orr
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