|
|
| A new report on mortgage activity during the first half of this year indicated that while the subprime share of overall originations has tumbled, the proportion of subprime loans with higher loan-to-values and lower credit scores has risen. Meanwhile, total loan volume has risen from the second half of last year — though the number of loans fell.
Those were the findings of the mid-year Mortgage Originations Survey released by the Mortgage Bankers Association Thursday. The report included data from mortgage bankers, commercial banks and thrifts and many of the top HMDA originators surveyed by MBA. The surveyed group originated $521 billion in first mortgages and $135 billion in second liens from January until June 2007. Loan volume during the first half of 2007 actually increased 3 percent from the second half of 2006, though the number of units funded was off 7 percent. Purchase production was off 5 percent based on volume and 13 percent based on loan count, while refinances jumped 11 percent in volume but fell 1 percent based on the number of loans. Purchases represented 45 percent of first half volume, down from around half. Just over 57 percent of refinance volume, which accounted for 55 percent of first half activity, was for cashout, falling from 64 percent. Fixed-rate originations accounted for 53 percent of loan volume, compared to 46 percent in the prior period. Adjustable-rate mortgage share was 16 percent. Looking at just interest-only originations, the dollar volume share was 31 percent compared to 29 percent in the second half of last year. Option ARM share fell from 13 percent last year to 6 percent in this year. Driven by a 16 percent decline in closed-end second mortgage volume, overall second lien activity was off 8 percent. Piggyback seconds represented 16 percent of second mortgage volume during the first half of this year. FHA-insured home equity conversion mortgage volume tumbled 92 percent from the second half of last year, but other reverse mortgage activity, including Fannie Mae’s Homekeeper product and private label loans, was up 13 percent. Around 32 percent of first half volume was jumbo — with the average jumbo loan coming in at $771,075, while the broker share was 44 percent. About half of all business was agency eligible — with a significant increase occurring from the first quarter to the second quarter. Prime mortgages represented 70 percent of first half volume, while the nonprime share was 10 percent and the Alt-A share was 16 percent. FHA and VA loans made up 4 percent of the activity. In the second half of last year, the prime share was 62 percent, the nonprime share was 18 percent, Alt-A accounted for 17 percent and the government share was 3 percent. A second MBA report that focused only on subprime volume indicated that loans with loan-to-values over 80 percent accounted for 62 percent of overall second quarter 2007 subprime volume, soaring from 40 percent during the third quarter 2006. At the same time, subprime loans with FICO scores at or below 650 climbed to 67 percent from 64 percent during that same period. Nearly 90 percent of all mortgages in the latest period were secured by owner occupied properties, with the remaining share fairly evenly split between investment properties and second home. |
|
|
Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com. e-mail:Â mtgsam@aol.com |
