Refinancing lull blamed on negative equity

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Fewer Americans sought to refinance their mortgages last week, even as interest rates fell to seven-month lows, according to the Mortgage Bankers Association, which suggested that many homeowners probably have too little equity in their homes to qualify. For the week that ended May 27, data from the MBA shows that refinance applications declined by 5.7 percent from the week prior, while purchase applications remained flat. Meanwhile, the average contract interest rate for 30-year fixed-rate mortgages declined to 4.58 percent — its lowest rate since November 2010 — from 4.69 percent one week ago. “The last time mortgage rates were this low, refinance volume was more than twenty percent higher,” said Mike Fratantoni, vice president of research and economics for the MBA. “It is likely that many borrowers still cannot qualify to refinance given the lack of equity in their homes.” TRD