Mortgage Applications Plunge: Composite Down 9.5%, Refinance Index Down 11.4%, Lowest Since July 2009

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Wed, 02/16/2011 - 08:17 | 966163 Dick Buttkiss
Dick Buttkiss's picture

Here's Mish on actual retail sales, which includes a very sobering homes sales chart. Stagflation, anyone? Or shall we go straight to hyperinflationary depression?

Wed, 02/16/2011 - 08:21 | 966177 Oh regional Indian
Oh regional Indian's picture

How about we go straight to the truth of the matter?

Expose the big lie?

Call the emperor naked?


Wed, 02/16/2011 - 08:32 | 966191 cossack55
cossack55's picture

There you go again, ORI.  Always with the truth chant.  Please.  Don't you realize most people can't hadle the truth (sounds like a good movie line....maybe JN).  I'm finding more and more people don't even want to hear it.  Fun times ahead, for sure.

Wed, 02/16/2011 - 08:45 | 966218 Oh regional Indian
Oh regional Indian's picture

Imagine my social life Cossack! :-)


Wed, 02/16/2011 - 08:16 | 966164 papaswamp
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This is how they keep the CPI look housing deflation. The problem is people aren't buying a house everyday. The big move I'm waiting for the government to do is forgive all intra-governmental loans. This would whack $4.6 Trillion off the debt.

Wed, 02/16/2011 - 08:26 | 966183 snowball777
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Jubilee for them, austerity for you?

Wed, 02/16/2011 - 10:11 | 966419 ElvisDog
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Except someone or something is counting that $4.6T as an asset and is probably counting on it to pay someone at some point.

Wed, 02/16/2011 - 08:17 | 966166 AmCockerSpaniel
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Green Shoots

Wed, 02/16/2011 - 10:30 | 966477 The Grip
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Speaking of Green Shoots...

Yesterday I received a notice from B of A indicating that it is transferring servicing of the note on my primary residence to "Green Tree" Servicing.

My assumption is that this is the special toxic waste dump for all paper originated by C(o)untrywide?

Wed, 02/16/2011 - 08:25 | 966168 Zero Govt
Zero Govt's picture

CNBC will be needing the forklift again to wheel out Steve Leisman with some 'happy data' to counter this story . . . . . . cue white noise ..."Steve, you're on"

Wed, 02/16/2011 - 08:18 | 966169 Bob
Bob's picture

It's just like the morts--give them a wealth effect and they just don't know what to do with it.

Wed, 02/16/2011 - 08:19 | 966172 snowball777
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I've got my 20% down, but I can assure you my hesitation about buying a house has more to do with rampant fraud in the mortgage industry and belief that the market will dip heavily again than the slightly higher interest rates.


Wed, 02/16/2011 - 08:37 | 966201 cossack55
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I am looking at a 0% down transaction at this time.  I only have to wait until the piano is completley unpacked first.  Got a great spot picked out in a forrested area by a cute little creek.  Flood plain area, but its free.

Wed, 02/16/2011 - 09:18 | 966294 Id fight Gandhi
Id fight Gandhi's picture

Vacant rotting McMansions and condos. Long live the great recovery.

Wed, 02/16/2011 - 10:01 | 966395 snowball777
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Why do I have an image of a pup tent with a baby grand next to it in my head?

Wed, 02/16/2011 - 10:23 | 966461 Founders Keeper
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[...and belief that the market will dip heavily again than the slightly higher interest rates.]---snowball777

Yes, that's a difficult place from which to make a decision to buy a house:

Knowing house values have still to fall dramatically> ???? <Knowing mortgage rates will soon rise dramatically.

Desperate times call for desperate measures. It's risk full-on as a far as the eye can see.


Wed, 02/16/2011 - 13:20 | 967131 snowball777
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Only a problem if buying requires me to borrow. ;)

Wed, 02/16/2011 - 08:22 | 966179 Wynn
Wynn's picture

Just think of all those poor MERS loans in need of a new, clean title.

Wed, 02/16/2011 - 08:48 | 966229 blindfaith
blindfaith's picture

Well Wynn, at least you understand.



The only way these titles can be "cleaned" is if the USA congress passes a 'land title' repair act and it is signed by "a" president ( notice I did not say this president who allowed this to get this bad and did nothing).  Why would it take a congressional declaration?  Because it is an interstate matter, with interstate interests according to the commercial credit laws, and because there are also international interests in the shadows.  These boys all know this is the only clean and true answer to the snake pit that real estate finds itself in.

These titles that judges are handing over to banks and to 'new owners' are only going to make matters worse.

Serious advice to anyone thinking to buy property...if it has had any mortgage on it during the last 11 years is likely a time bomb (outside of a private or perhaps local bank who held the mortgage and can prove it never left their possession).

Wed, 02/16/2011 - 08:34 | 966194 oh_bama
oh_bama's picture

Big deal. Everyone knows. Ask yourself: Is it more powerful than the POMOs and QEs?

Just BTFD, and be a winner!


Wed, 02/16/2011 - 08:39 | 966208 Bob
Bob's picture

MOMO it is!  Ya gotta luv biflation . . .

Wed, 02/16/2011 - 08:37 | 966204 Sam Clemons
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Let me guess.  This was unexpected.

Wed, 02/16/2011 - 08:49 | 966233 johnQpublic
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maybe one of the reasons not alot of people took the option to refi at the lows in october, is the fact that it can take years to break even on a refi even if your payment goes down. Ours will take just under four years to braek even and we lowered our payment and went from a 30yr to a 20yr.

closing costs are a bitch, even paying no points

i'm sure alot of people balk at paying 4400 bucks to borrow less from the same bank as they had the loan with originally

same house, same or lower loan,same bank

adjust for inflation and its a losing prospect obvious to anyone with a calculator

32k paper savings over twenty years adjusted for inflation using the govts own figures is but 8k savings in reality

4400 now to save 8k over twenty years

net gain 3600 bucks....if my wife wasnt so adamant about it, i woulda said no

and thats the math on 225k at 5.625 vs 4.125

with 25% equity that was 43% equity(befor crash)

obviously ours was a best case scenario and the savings is basically zero

the bank gives a nice puffy happy savings number that is much higher, but its not reality


the 'slump' in refi's is people waking up to the reality of the math

and we havent even mentioned unemployment,rising taxes as house values plummet,underwater mortgages,and the generally negative feelings about the economy


Wed, 02/16/2011 - 08:57 | 966263 johnQpublic
johnQpublic's picture

one more thing:


notice 'flip that house' replaced by 'income property'

'million dollar listings' replaced by 'storage wars'

'auction kings'

pawn stars

2 other pawn shop shows i dont know names of

3 auction shows on tv

3 storage unit takeover shows on tv......when you cant pay your storage bill, you lose your shit

american pickers

the shift is there for everyone to see

theres no money to be made flipping houses so pawn your shit or sell it at auction or lose it is the new message

at a minimum theres a subliminal message there

welcome to the new normal

soon to come

"american nomads" tv show about people living in their cars

i think the add was on A+E...mighta been TLC

Wed, 02/16/2011 - 10:02 | 966402 snowball777
snowball777's picture

From home repair to home defense.

Wed, 02/16/2011 - 11:48 | 966689 MachoMan
MachoMan's picture

If you notice on the flip that house episodes, they've redone them and the dates are often from 2010+...  basically, the parenthetical on the show information would show 2006/2007 vintage flips and my guess is people called bullshit...  then they put 2010 on it and people said, "hey, i've already seen this episode and it was from 2006/2007, so I'm calling bullshit."  So, now we get flooded with more appropriate programming...

PS, hardcore pawn is pretty sobering...  as someone who is planning on opening up a pawn shop, the patrons coming in and telling the owner, "I need $700, here is this jewelry piece."  The owner looks at it, "I can give you $100, I will only get $80 wholesale from it if I sell it."  Patron, "NO!!!!!! I TOLD YOU I NEED $700!!! YOU DONT CARE ABOUT ME!  YOU JUST CARE ABOUT YOURSELF!"...  Why be in the pawn business when apparently it is your god given obligation to pull down your trousers and grab your ankles for every person that cares to have a go?  Crazy...

Wed, 02/16/2011 - 10:16 | 966428 ElvisDog
ElvisDog's picture

It's not just closing costs. I just helped my mom buy a house, and the number of people who have their hands held out on a real estate transaction these days is staggering. The total expense for various fees, taxes, inspections, etc., etc., was around $16K. So if you buy a house, even if you pay cash which my mom did, you are immediately underwater on the purchase. I think the lower rate of transactions have caused all these desperate RE people to pile on to whatever transactions are being made.

Wed, 02/16/2011 - 11:25 | 966626 bankonzhongguo
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I checked into a "streamline" FHA refi for a neighbor.  The secret sauce is the re-payment of the fraudulent Private Mortgage Insurance - 1.5% of the price.  (There is a lost story - how often do banks collect on their PMI losses these last years?  That is a ton of premiums paid - for what?) So a loan refi of $300,000 needs $4,500 minus credit upfront PMI fees never-mind all the other crap - you do it to avoid the appraisal and inability to refi on your underwater home.  And that adjusts your mortgage from 6.5% to 5.5%?  Please.  This Fourth Turning needs to change to First Turning and people will need to just bite the bullet and pay-down the principal on their loans.  I think one is better off just taking any extra money paid in a refi costing costs and reduce the principal directly and then force the bank to adjust/reset the loan every 6-12 months - its a pretty standard term.  You have to ask for it special.  You are still getting a tax deduction on the interest expense, so maybe you are getting something back on that little amount of extra interest every year.  The whole "extra" mortgage payment a year deal takes 5 years off the 30 year term.  Paying a third more each month effective cuts your mortgage term in half and you wind up paying over a half less on interest.  Blah blah blah.  Then again you can just torch it if things don't go your way.  Cut ports into exterior walls sheet rock exposing multiple framing studs.  Lay hay bale near opening.  Open all house windows and doors. Fill liquid sprayer with 1 part gasoline and 2 parts motor oil.  Pressurize.  Apply liberal coating to surfaces.  Start upstairs and work toward front door.  Move to other country. Never return.

Wed, 02/16/2011 - 11:43 | 966698 MachoMan
MachoMan's picture

No PMI for 80% LTV...  if you can't find a favorable appraisal or don't have the cash, then the cost of business is too high.

Wed, 02/16/2011 - 08:58 | 966266 Cdad
Cdad's picture

Cue J. Dimon whining about how it is not fair that useless unemployed people are not doing their part to lift the fictitious value of his entirely fictitious mortgage book while simultaneously lowering loan loss reserves and raising the bonus pool.

Bankers just never get a break...and it's just not fair.

Wed, 02/16/2011 - 10:03 | 966406 snowball777
snowball777's picture

Maybe Phil Gramm can give us another 'pep talk'.

Wed, 02/16/2011 - 09:31 | 966331 jbc77
jbc77's picture

No suprise that there ZERO reaction from the capital markets on this wonderful news.

Wed, 02/16/2011 - 09:34 | 966337 bronzie
bronzie's picture

according to Martin Armstrong's cycle work the current downturn in the housing market won't bottom until 2032

other posters mentioned some of the reasons that Martin may be correct:

- rising interest rates

- MERS (and other fraudulent activities: robo-signing, fraud-closure) creates uncertainty about ownership (clouded titles)

here are just a few more trends that will contribute to Martin's prediction:

- demographics - boomers will be downsizing into coffins and urns for the next 20 years

- increasing unemployment - 22% and climbing (

- increasing duration of unemployment once the job is lost

- 2 years of visible for-sale inventory (anything over 8 months usually means that price pressure is downward)

- ?? years of shadow inventory: people "waiting for the market to come back" before they sell, living in the house but not paying mortgage, REOs, somewhere in the foreclosure process but not yet REO

- glut of condos yet to be completed / sold - this is true of most major cities in the country

- banks are only originating mortgages that they can sell to Fannie and Freddie (ie, the govt) - this is 95%+ of the mortgage market and govt is starting to talk about doing away with the GSEs

did I miss anything?

Wed, 02/16/2011 - 10:05 | 966409 snowball777
snowball777's picture

Even those who are employed are uncertain enough about job security to avoid risking more debt.

Call it the "Paradox of Grift".

Wed, 02/16/2011 - 11:46 | 966714 MachoMan
MachoMan's picture

Bingo.  I'm about to start a business or two and, out of an abundance of caution, I am going to sell my house to relieve the debt load and rent...  If I am going to have any debt, then that debt had better damn well be working for me rather than as a consumptive expense...  (or at least have the possibility of working for me, heh).

Wed, 02/16/2011 - 09:40 | 966351 Mach1513
Mach1513's picture

Re-fi? Don't you need equity for that? Or a lot of cash on the sidelines?

Over 50% of homes under water when adjusted for re-fi costs.

Wed, 02/16/2011 - 10:05 | 966408 Freewheelin Franklin
Freewheelin Franklin's picture

Fuck me. I own a construction comapny. Time to find a new "recession proof" business. Anybody know of any shithole bars for sale? Heineken? FUCK THAT SHIT! Pabst Blue Ribbon, bitchez!



Wed, 02/16/2011 - 10:07 | 966414 snowball777
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Was helping a friend with some foundation work and we found an ancient can of Pabst the crew had left when the place was built in the 60s.

Unclear if it tasted any worse than when it was brewed.

Wed, 02/16/2011 - 15:16 | 967631 LFMayor
LFMayor's picture

I bet it still gifted a full power dose of the green beer shitz, though.

Wed, 02/16/2011 - 10:08 | 966415 Life of Illusion
Life of Illusion's picture

Gov. is choosing who stays in homes, gets note mods, foreclosed or not, inventory control, 95% of loans issued and on and on.

Government controlled housing for a country in decline, all built via fraud. Unlike other countries turned into a third world we built in advance for the people.

Wed, 02/16/2011 - 13:18 | 967117 Problem Is
Problem Is's picture

"Great Comrade and Wonderful Central Planner Bernank's explanation of why this collapse in refinancing activity is actually precisely as planned."

I will wait for the "brilliant" Lawerence Yun, economist at the National Ass(ociation) of Realtors to weigh in...


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