Mortgage loan applications are down for the week of April 12th but does anyone know why? Maybe it’s USDA.

The Mortgage Bankers Association reports that mortgage applications for the week ending April 9^th are down almost 10% from the previous week. They go on to cite the recent increase in FHA upfront mortgage insurance as the main factor, and they likely have numbers to back up that statement. What the press release says is that a 19.1% decrease in "government purchase applications" fueled the drop, but do their numbers break down what specific programs were impacted most?

My point is that as of last week most lenders in the country have given up on taking USDA Guaranteed Rural Development loans since the program is anticipated to run out of funds later this month. If the MBA is counting these USDA loans as "government purchase applications" (isn't everything a "government purchase application anymore?), then it stands to reason the USDA issue may be much bigger than anyone is anticipating.

A Bloomberg commentary on the matter states the setback raises "new questions over what should be a strong month for housing demand given the pending expiration of second-round stimulus". These are the very thoughts Congress should be considering while they let the final round of Homebuyer Tax Credits expire while not providing additional funding to a program that has resulted in some 3500 closed loans from October, 2009 thru February, 2010 in Florida alone!

Hopefully it will soon be announced that efforts are underway to allocate more funds to the USDA Rural Development loans. In the interim, huge efforts that have been made to help the housing industry are being wasted and opportunities are being lost. Please contact your representatives in the Senate, the House or most importantly the Senate Appropriations Committee and urge them to provide funds for the USDA loan programs.

Gerry Suarez, Jr.

Your FHA Loan Pro!