WASHINGTON—Fannie Mae has launched its Refinance Application-Level Index (RALI), a weekly series designed to provide the market timely and comprehensive tracking of refinance activity and historical trends, Fannie Mae announced.
According to Fannie Mae, the RALI sources data from the industry’s most widely used automated underwriting system, Fannie Mae’s Desktop Underwriter (DU), to provide lenders, investors, and other market participants with increased transparency on the past week’s refinance application trends, supporting more refined prepayment projections.
Fannie Mae said the RALI will be published weekly each Tuesday at 10:00 am ET, except where noted in the publication calendar.
‘More Accurate Tracking’
“We are pleased to begin sharing the Fannie Mae Refinance Application-Level Index with external users, as we believe it will support more accurate tracking, modeling, and planning of refinance activity by mortgage market participants,” said Doug Duncan, Fannie Mae senior vice president and chief economist.
Added Devang Doshi, Fannie Mae senior vice president, capital markets – single-family products, “Forecasting refinance originations and prepayments has become more challenging in the past two years, as the observed relationship between refinance incentive and prepayments has evolved. The RALI has been a strong leading indicator for prepayment activities, and we believe the additional transparency it brings industry participants will improve prepayment modeling performance.”
Two Measures
Fannie Mae said RALI provides two measures, a dollar volume measure of unpaid principal balance (RALI ($) and a loan count measure (RALI (count)). For the week ending June 10, 2022, which followed the Memorial Day holiday, the dollar volume of refinance applications increased 17.9% week over week. RALI dollar volume is down 69.5% compared to the same week last year. RALI count increased 16.2% week over week and is down 68.6% compared to the same week last year.