Mortgage applications swooned 12.3% in the week ended Dec. 14, as refinances were off 14% and purchases decline 5%, according to data from the Mortgage Bankers Association's weekly mortgage applications survey.

"Despite the Federal Reserve's announcement last week that it would purchase an additional $45 billion in Treasury securities per month as part of its continuing quantitative easing effort, rates increased in the second half of the week," said Mike Fratantoni, MBA's vice president of research and economics. "As a result, refinance applications dropped sharply to the lowest level in over a month."

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