Data on lending activity during 2011
at 7,632 financial institutions that are covered by the Home Mortgage
Disclosure Act (HDMA) was released today and showed continued heavy reliance on
FHA-backed mortgage loans. The data came
from the Federal Financial Institutions Examination Council (FFIEC) and covered
banks, savings associations, credit unions, and mortgage companies. The activity monitored including mortgage
applications, originations, purchases and sales of loans.
The total number of originated loans
of all types and purposes reported fell by about 780,000, or 10 percent, from
2010, in part because of a 13 percent decline in refinancing. Home purchase
lending also fell, but by a more modest 5 percent.
The FHA-related lending that
increased several years ago with the onset of problems in the mortgage industry
continued at higher than normal levels.
For home purchase lending, FHA's share of first-lien loans, which was at
7 percent in 2007 increased steadily to 37 percent in 2009 and 36 percent in
2010. In 2011 that share fell to 31
percent, still well above historic levels for the agency
First lien lending for home
purchases through the Veterans Administration has also increased in recent
years, although it represents a far smaller share of the market than FHAs. VA-guaranteed loans went from a 3 percent
share in 2007 to about 7 percent in 2009 and 2010. It increased again in 2011 to 8 percent.
The aggregate of reported
conventional, FHA, and VA-related refinancing diminished slightly from 2010,
but the VA component of this refinancing was up by 41 percent, partially offsetting
declines of 12 percent and 37 percent for conventional and FHA-related
The number of covered institutions
reporting was down nearly 4 percent from 2010, continuing a downward trend
since 2006 when just over 8,900 institutions reported. FFIEC said this decrease reflects mergers,
acquisitions, and some bank failures.
The data involves 11.7 million loan applications, 7.1 million
originations, and 2.9 million loan purchases. It also includes information on 186,000
requests for preapprovals that did not result in a loan.
The 2011 data reflect the second
full year of reporting under revised loan pricing rules, which determine
whether a loan is classified as "higher priced." Lenders now report loans with
annual percentage rates (APRs) that are 1.5 percentage points above the rates
reported by Freddie Mac in its Primary Mortgage Market Survey1
rate for first lien loans and 3.5 percentage points for junior liens.
The data show that a small minority
of first lien loans in 2011 have APRs that exceeded the loan price reporting
thresholds. The principal exception was for conventional first lien loans used
to purchase manufactured homes; for which 82 percent exceeded the reporting
threshold in 2011. For conventional first lien loans used to purchase
site-built properties, about 3.9 percent of the reported loans exceeded the
reporting threshold (up from 3.3 percent in 2010). The incidence of
higher-priced lending for FHA-insured loans on site-built properties (3.8
percent in 2011) is virtually the same as for conventional loans. The incidence
of higher-priced lending for loans backed by VA guarantees is notably smaller
than for either conventional or FHA-insured loans; only about 0.4 percent of
VA-guaranteed loans were higher priced in 2011.
Data on the disposition of
applications for conventional purchase loans in 2011 showed minority applicants
experienced higher loan denial rates than the nearly identical rates for Asian
and for non-Hispanic white applicants.
This data has changed little in recent years.
The report notes that the HMDA data
cannot be used in isolation to determine if a lender is complying with fair
lending laws as they do not include many determinants of creditworthiness and
loan pricing. When examiners conduct
fair lending examinations they analyze additional information such as credit
history and loan-to-value ratios.
The FFIEC also provides data from
the nation's seven largest private mortgage insurance companies. The 2011
private mortgage insurance data include information on nearly 409,000
applications for mortgage insurance, comprised of some 257,000 applications to
insure home purchase mortgages, and about 151,000 applications to insure
mortgages to refinance existing obligations.
All raw data is available at the FFIEC