Mortgage applications have dropped for six out of the past seven weeks, according to the Mortgage Bankers Association's seasonally adjusted index.
A rebound in consumer confidence and economic growth in the new year should allow more home owners to escape the "negative equity trap," according to CoreLogic.
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The Federal Housing Finance Agency is inviting the public to comment on a new proposal aimed at reducing Fannie Mae and Freddie Mac's presence in the high-end mortgage market.