Mortgage risk levels have moderated over the last six months because of more stringent lending policies, and the use of adjustable rate loans is now at its lowest point since February 2004, according to two reports released Wednesday. Nationwide, mortgage risk fell 9.8 percent in the February-to-July period versus the prior six months, said the San Juan Capistrano-based Web site HomeSmartReports.com. “There was a lot of noisy buying and financing activity as people saw the real estate cycle enter its final phase,” said company president Mike Ela. On a risk scale of one to 100, California had score of 1.44 for the six-month period, a decrease of 5.3 percent. The refinance share of mortgage activity increased to 40.6 percent of total applications from 39.6 percent the previous week. Association officials were not available for comment. Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge, said that reports such as these show that one segment of the market has retreated to the sidelines. “You have a segment of the market that is pulling out. The folks that were getting in last year and looking for appreciation. Most of the people are looking at this and saying there’s not going to be that much appreciation.” Appreciation rates are approaching flatline status in some areas, and the big question now is where will the settle. “Some would say the prices went beyond ultimately what they may settle at,” Blake said. “We’re not saying that. Yet.” [email protected] (818) 713-3743160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWhy these photogenic dumplings are popping up in Los AngelesThis is at the low end of the spectrum, Ela said. For example, Ohio had the highest risk score for the period, 15.72. These risk scores do not focus in an individual’s credit worthiness but what is going on in the neighborhoods where the homes are being bought, Ela said. Also on Wednesday, the Washington, D.C.-based Mortgage Bankers Association said that its index measuring home loan application volume decreased 1.2 percent compared with the previous week and was down 25.1 percent compared with the same week one year earlier. The adjustable-rate mortgage share of activity decreased to 26.4 percent of total applications from 27.2 percent the previous week.