Mortgage application volume fell 4 percent during the week ending Aug. 24, according to the Mortgage Bankers Association’s weekly application survey.
The MBA’s market composite index fell to 615.2 from 641.1 the previous week.

Refinance volume fell 4.2 percent, while purchase volume dropped 4 percent from the prior week.

Mortgages have gone increasingly delinquent and into default in recent months, with adjustable-rate mortgages, especially among subprime borrowers, among the worst-performing loans.

Adjustable-rate mortgages, which have accounted for the bulk of rising delinquencies and defaults, accounted for 15 percent of all mortgage applications during the week, down from 18.6 percent during the prior week and 26.8 percent during the comparable week one year ago.

Dozens of mortgage lenders have gone bankrupt in recent months as lending volume continues to tumble while performance further deteriorates.

The average interest rate for a traditional, 30-year fixed-rate mortgage fell to 6.41 percent from 6.49 percent the previous week. The rate was 6.39 percent one year ago