By Michael Bates at MortgageOrb
Increasing refinance volume continued to drive down the rate of defects in mortgage applications in the third quarter of 2019, according to ARMCO’s most recent Mortgage QC Trends Report.
The overall rate of critical defects was 1.56%, a decrease of 9% compared with the second quarter and a decrease of 19% compared with the peak, which occurred in the fourth quarter of 2018.
The percentage of government loans reviewed during the third quarter fell, as the interest rate environment drove more conventional refinances, resulting in a 10% improvement on FHA loan defects compared to the previous quarter.
Defect performance for purchase loans also improved, with defect categories related to core underwriting and qualification showing improvements when compared with the second quarter of 2019...
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