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Mortgage applications jumpAccording to a report in the Wall Street Journal, banks have begun receiving many more applications for new mortgages as people realize they have a chance at landing a real estate bargain. The increase in applications is most significant among those who are looking to refinance their home loans, but there are new buyers in there too. Bank of America spokesperson Dan Frahm told the news provider that it saw its volume of mortgage loan applications nearly double during the first two weeks of December, compared with the same period in November. Other lenders, such as JP Morgan Chase, said that they had also seen rises - both before and after the recent Federal Reserve rate cut. But spokesperson Tom Kelly said that the bank isn't counting on an upturn in the housing market until they determine how many of the applications can actually be approved. Tighter lending criteria has tended to push the minimum standard for credit scores higher at many major banks which, only one year ago, would have easily granted home loans. Meanwhile, the glimmer of hope for the housing industry has been balanced by a separate report from the Treasury Department indicating mortgage defaults are continuing to increase, even as some borrowers have their loans modified. In response to these findings, consumer groups have pointed out that until fairly recently, many lender modification programs did not make significant changes to the terms of the loan. "You really have to work it out to a sustainable loan, not just one that is designed to default because after a year it's going to rise again," Center for Responsible Lending's Kathleen Day told Reuters.
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