New Record on FHA Refinance Mortgages in May

The chart shows monthly number of FHA refinance mortgage originations.

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FHA refinance mortgage originations reached a new monthly high in May. May also represents the sixth consecutive month of increases in the number of FHA refinance transactions. There were 83,458 FHA refinance mortgages in May and the total loan amounts were 16.48 billion dollars. This represents a 68 percent increase in the number of FHA refinance origination over the prior year. In May of 2008, there were 49,680 FHA refinance mortgages and a total refinance loan amount of 8.85 billion dollars. In April of this year there were 81,078 FHA refinance mortgages with total loan amounts of 15.79 billion dollars. The monthly increase over April 2009 was 3 percent.

FHA loan products gives mortgage lenders something to do!

Equity Source Home Loans is the leading FHA VA Refi Mortgage Lender in NJ

Equity Source Home Loans of Morganville, NJ, is the leading lender in New Jersey for FHA and VA refinance mortgages.

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The report above display FHA and VA mortgage lending in New Jersey for 2009 through April. Equity Source HL obtained a 6.89% market share with 896 refinance mortgage originations in 2009. This places Equity Source HL well ahead of Countrywide (now part of Bank of America) which had a market share of 4.38% with 616 FHA VA refinance mortgages in New Jersey.

Equity Source has 13 branch offices in New Jersey. The area of highest concentration of Equity Source's mortgage originations were found in Ocean County, New Jersey.

Impressive!

If TBW Does Not First Succeed, Just Settle, Pay Fine, and Move On!

The Gainesville Sun reports that Taylor, Bean, and Whitaker Mortgage (TB&W) agreed to pay state agencies a $9 million dollar settlement for modifying loan applicant information to obtain lending approval. This applies to mortgages originated in 2006 and 2007. The article states that Lee Farkas, TB&W’s president, did not admit to any wrongdoing.

MortgageDataWeb checked Home Mortgage Disclosure Act (HMDA) data for 2006 and 2007. Using TB&W’s HMDA data we used the rate spread field to determine if TB&W originated mortgages had annual percentage rates in range commonly recognized as subprime mortgages. The HMDA data records examined include first lien conventional purchase or refinance mortgages having conforming loan amounts on owner occupied site built homes. None of TB&W’s mortgages for this category in 2006 or in 2007 had a rate spread value. This suggests that all of TBW’s mortgage originations had annual percentage rates below the 3 percent reporting threshold. TB&W's mortgages are not subprime mortgages.

Many other mortgage originators charged home borrowers excessively high fees and interest rates much higher than TB&W. These other mortgage originators made a large contribution to the collapse of the housing and finance industries. TB&W was responsible for the mortgage and housing train wreck.

You would think there are other lenders that state agencies can pick on in order to serve the public interest. Feel free to name any that are still around!

The Disappearing ARM Mortgage

Adjustable rate mortgages (ARMs) use to be popular products. Recent news about many borrowers having difficulty meeting new payments when their adjustable rate mortgages were recast were likely contributors to the falloff in demand for these products. The decline in adjustable rate mortgages over time is remarkable.

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The chart above shows the monthly percentage of mortgages having adjustable rates. The percentage of fixed rate mortgages would be the difference from 100 for adjustable rate mortgages. The chart shows ARMs reached a peak (or fixed rate mortgages reached a low) in years 2004 and 2005. Isn't that the same time irrational exuberance peaked in mortgage lending?

FHA Mortgages Thematic Map

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The map shows the number of FHA mortgage originations (purchase and refinance combined) by county in the U.S. for 2008. The warm colors show the areas having the highest amounts of FHA mortgages while the cool colors are county areas having the fewest numbers of FHA mortgages. Alaska, Hawaii, and Puerto Rico were position adjusted and rescaled.

Contact MortgageDataWeb to order historical mortgage data, current mortgage data, by geographic location for all types of mortgages.

Las Vegas Mortgage Market Concentration

Mortgage market concentration describes the level in which a few mortgage firms account for the preponderance of the total share of business in the market. Sometimes the winner takes all or mostly all of the business in a market. In general, mortgage markets are competitive. There are many firms competing to originate mortgages in Las Vegas.

By applying metrics, we can observe trends over time and determine if the markets are moving towards greater market concentration (when a few mortgage firms dominate the market) or moving towards greater competition (the leaders of the market have smaller portions of the total).

Two measurements of concentration were applied to the mortgage market for Las Vegas. The data comes from MortgageDataWeb's municipal mortgage records database. One metric, known as a concentration ratio, measures the share of the market attributed to the top “n” mortgage lenders. Low values of concentration ratio describe competitive markets. High concentration ratios suggest market domination by the top firms. Another measurement of market concentration is the Herfindahl-Hirschman Index (HHI). HHI is equal to the sum of the squares of market share of each participant in the market. If a small hand full of firms have very large market share, the market will show higher values for HHI. If a lender had a 35 percent market share, HHI will exceed 1200 for the market. If the top lender had a 10 percent market share then HHI would not exceed 1000.

Click Chart for Large View

The chart above shows the mortgage market concentration ratio for Las Vegas metropolitan area for year from 2003 to 2009 (year to date). Both the concentration ratio for the top 20 mortgage lenders and the HHI were included. The concentration ratio reached a bottom in 2005. 2005 was the peak year of home prices growth, subprime lending, and the irrational exuberance that lead to the breakdown of housing and mortgage lending in the years that followed.. Many mortgage company participants were involved in Las Vegas and homeowners in Las Vegas were less partial to any particular mortgage lender. Since 2005, the concentration ratio increased. Fewer mortgage companies participated in loan originations within Las Vegas. HHI, plotted on the same chart above tracked the concentration ratio for the top 20 lenders. The HHI value was lowest in 2005 and increased each year showing that the direction moved towards increased market concentration. The markets were not dominated since HHI remained relatively low.

Market concentration in Las Vegas seems to have stabilized. As more bank failures occur and more mergers occur, we have a potential problem moving forward however the numbers show a very competitive mortgage market in Las Vegas.

Geography of Veterans' Administration Mortgages

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The thematic map shows the number of Veterans' Administration (VA) guaranteed mortgages originated by county in the U.S. for 2008. The hotter colors show the higher incidences of VA mortgages. Note the regional clusters in the southwest, the Seattle Metropolitan area, and central Texas. Many of the highly populated metropolitan areas in the northeast do not show high incidences of VA mortgages.

Previously, a thematic map of VA mortgage originations by county appeared on this blog. That map covered the January through June 2008 period. The same classifications of colors was used enabling readers to observe the time oriented changes between the two periods. Clearly there has been considerable growth in VA mortgage originations in the second half of 2008.

FHA Mortgages Setting New Refiance Records in April 2009

FHA was the vehicle of choice for borrowers refinancing more than $15 billion of home mortgages in April. This is a new monthly record. April was the second consecutive month that had FHA refinance originations exceeding 15 billion.

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The chart below shows monthly total FHA mortgage originations (dollars in thousands) used to refinance existing home mortgages.

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On another note the average FHA refiance mortgage climbed to a new record of $193,500 in April. FHA is gaining market share at the expense of conventional home financing products.

Fairfax Virginia New Home Owners Carry Less Mortgage Debt

In Fairfax County, VA., the average mortgage amount for $conforming (non jumbo) mortgages declined to $272,000 during the first quarter of 2009. This is more than a 16% decrease from the average mortgage loan amount of $conforming mortgages in Fairfax County Virginia during the first quarter of 2008 when the average loan was $317,000.

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The chart above shows the monthly average mortgage amount for conventional purchase money mortgages on properties in Fairfax County Virginia. Only conventional mortgages having mortgage amount below the conforming limit are included ($417,000 for mortgages with closing dates in 2006, 2007, 2008 and 2009 and $360,000 for mortgages having closing dates in 2005).

Home purchasers are able to obtain lower first lien mortgages to purchase homes in Fairfax as a result of decreases in home prices.

The savings to Fairfax home owners has its costs to mortgage lenders. Not only are mortgage lenders originating fewer mortgages, the reduced loan amounts result in reduced loan origination fees. Mortgage lenders typically charge 1 percent of the mortgage amount for their compensation in originating the mortgage.

Gulf Coast B & T is the New Mortgage Origination Leader in New Orleans

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The New Orleans mortgage market use to be dominated by the large national bank holding companies. You would need to look back a long time ago to not see mortgage lenders such as Countrywide, JP Morgan Chase, and Wells Fargo as the leaders of the New Orleans mortgage market.

Things are different in 2009. Banks and mortgage lenders headquartered here in New Orleans metro are out performing the national companies. The report above provides mortgage market share of mortgage lenders who originated conventional purchase mortgages in New Orleans for the first quarter of 2009. Gulf Coast Bank and Trust is the leader. Standard Mortgage and Whitney National Bank are near the top in conventional mortgages.

The market share report below describes FHA mortgage market share. Gulf Coast Bank and Trust leads the New Orleans mortgage market originating the most FHA purchase mortgages in 2007. Eustis Mortgage and Standard Mortgage are second and third in FHA mortgages in New Orleans.

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The Business Bank Approaches the Top of Minneapolis FHAVA

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What a difference a year makes. During the first quarter of 2008, few mortgage lenders realized that FHA and VA mortgages were to become the key growth products in their markets. In metropolitan Minneapolis, only 1,903 FHA and VA mortgages totaling $370 million were originated in the first three months of 2008. The volume in the first three months of 2009 was triple over the same period in 2008. FHAVA originations passed $1 billion.

The Minneapolis mortgage market’s “green shoot” is The Business Bank of Minnetonka. The Business Bank, whose mortgage division is known as Prime Mortgage, gained the largest market share during over the past year. In the Minneapolis market area, The Business Bank ranked 19th in FHA VA mortgage originations during the first quarter in 2008. Now in 2009 they are second in the market right behind Wells Fargo. A local bank is about to challenge Well’s first place position.

Welcome The Business Bank to the big boy club of Minneapolis!

FHA/VA Average Mortgage Amount Reaches Three Year High

In March 2009, the Average FHA/VA Mortgage Amount reached a new monthly high during the January 2006 through March 2009 timeframe. The FHA/VA Average Mortgage in March was $185, 752. See the chart below for the month-by-month trend over the last three years.

Click on the image below for a larger view.

As the chart shows, this growth in the FHA/VA Average Mortgage Amount has been pretty consistent since the maximum loan amounts were raised last year. As the housing market bounces back, we should expect this trend to continue. We will perform this analysis again in the future to see if we are correct.

Higher Average Loan Amounts on Conventional Refinance Mortgages

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There has been a spike in the average mortgage loan amount for conventional refinance mortgages. This makes sense based upon the record low interest rates for new mortgages and the need for homeowners having variable rate mortgages to replace them with less risky fixed rate mortgages. More home owner debt refinanced at current interest rates results in significant savings for the borrowers. Based upon data collected from municipal recordings from more than 500 counties nationwide, the average conventional refinance mortgage jumped passed $210,000 in 2009 from below $200,000 in 2008. Because of stricter underwriting requirements and depressed home values, fewer conventional refinance mortgages were originated than previous time periods during the past 10 years.

Conventional Purchase Mortgages Continue to Trend Down

Conventional Purchase Mortgages continued to trend downward in March. The chart below shows the trend over the last two years of monthly Conventional Purchase Mortgages nationwide.

Click on the image below to get a larger view.

The March 2009 numbers are nearly two-thirds lower than March 2008. It will be interesting to compare the numbers later on this Spring to see if there is any improvement.

FHA Purchase Mortgages: Market Where the Sun Shines

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The chart above reflects monthly FHA endorsements of purchase money mortgages. HUD endorses most mortgages for FHA insurance thirty to sixty days after closing.

Originations of FHA purchase mortgages show a steady increase during the first quarter of 2009. In the first quarter of 2009, 182,535 FHA purchase mortgages were endoresed by HUD. This was a 77 percent increase over the same period in 2008. In March 2009, FHA purchase mortgage originations were nearly 60,000. This represents a 43 percent increase over March 2008 when there were roughly 41,800 endorsements of FHA purchase mortgages.

Note that the peak of FHA purchase originations during the third and fourth quarters of 2008. This peak occurred as a result of legislation that made all seller assisted down payment assistance mortgages ineligible for FHA insurance. Many seller assisted down payment transactions were rushed though the September 30 deadline. The trend trend line of new FHA purchase mortgages indicates that FHA purchase mortgages in 2009 are likely to outpace FHA purchase originations in 2008.

VA Purchase Mortgage Orginations Grow in First Quarter 2009

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Veteran Administration (VA) purchase mortgages are growing at a steady pace. Since 2007, monthly VA purchase mortgage originations have outpaced the origination volume over the same month of the prior year. This trend has continued into the first quarter of 2009.

The leading VA purchase money mortgage originators for 2009 include Wells Fargo with a market share exceeding 12 percent. Wells Fargo is followed by USAA Federal Savings Bank, Countrywide Bank, ,First Tennessee MetLife Bank, and Metrocities Mortgage.

New Record Highs for FHA Refinance Mortgages!

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FHA refinance mortgages surpassed the records set during the refinance boom of 2003. More than 80,000 refinance mortgages were endorsed for FHA insurance in March 2009. the previous record was 71,487 set back in September 2003.

The total mortgage dollar amounts have set records most months since May 2008 with $8.85 billion dollars in FHA refinance mortgages. In March 2009, the total dollar volume of FHA refinance mortgages exceeded $15 billion dollars. FHA continues to grab more market share across the nation as lenders have become reluctant to offer conventional financing not meeting Fannie Mae and Freddie Mac guidelines.

The leading FHA funding mortgage originators for the first quarter of 2009 are Countrywide Bank, Wells Fargo Mortgage, Taylor Bean & Whitaker, Flagstar Bank, and MetLife Bank.

Veterans Administration Refinance Mortgages Climbing HIGH!

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Veterans Administration (VA) guaranteed refinance mortgages have been on a steady climb during the first quarter of 2009. The chart shows the monthly number of VA mortgages for refinance over the past 30 months. March 2009 had over 15,000 new VA refinance mortgage originators, more than triple the number of the same type of VA mortgages for March of the prior year. The increase in VA mortgages for refinance is the result of low interest rates, more stringent qualifications for conventional mortgages, and easier qualifications for eligible veterans.

The average mortgage amounts of VA refinance mortgages are exceeding $215,000 in each of the first three months of 2009. The leading VA refinance mortgage originators include Wells Fargo Mortgage, National City Mortgage (Now PNC Bank), USAA Federal Savings Bank, Mortgage Investors Corp., and Taylor Bean & Whitaker Mortgage.

First Quarter Conventional Purchase Mortgage Originations Real Slow!

We hear a lot about sales of existing homes stabilizing. The conventional mortgage data has yet to confirm that trend. The chart above shows monthly conventional mortgage originations for home purchases. New lows are seen for the first quarter of 2009.

Since a large proportion of home purchases are distress sales (foreclosed real estate owned by banks and short sales), purchasers of homes might be using their own cash or non conventional sources for home purchases.

Travis County, TX Median Home Price Increase

The chart below shows the trend in Median Home Price for Travis County, Texas over the last year. By analyzing this chart below we may be seeing another sign that the housing market is improving in certain areas. We are seeing a modest seasonal increase in 2009 vs. 2008. The median home price in February 2009 was $218,000 compared to $203,000 in February 2008.

Click on the image below for a larger view of the chart.

Leading DAPs Realized Hugh Revenue in 2008

Down Payment Assistance Providers (DAPs) enabled borrowers to obtain FHA mortgages to purchase homes with no money down. In essence, the DAPs acted is if they were charities. The DAPs gifted the money for down payment and closing costs to the borrower. The funds for the gift came from the seller of the property. Typically the seller of the property inflated their selling price to accommodate the cost of the gift funds. The purchaser of the home typically paid a higher price for the home. In the transaction, the DAPs retained a fee. A typical fee was $500 for a transaction. Multiply the DAP fee times the number of transactions and you can see millions of dollars that the DAPs received through their transactions. Nehemiah and Ameridream were great at exploiting this program dominating more than 50 percent of the DAP market in 2008.

Seller assisted down payments are no longer eligible for FHA mortgage insurance. That leaves these down payment providers in the business of lobbying for changes in legislation that would permit them to once again skim hundreds of millions of dollars from homeowners once again.

Now ask which mortgage companies participated in this program and how much they benefited from seller assisted down payments the program!

FHA Originations Continue to Rise

Last month I wrote about the healthy increase in FHA originations from November to December nationally. The trend continued into January with increase in approximately 3,000 originations over the December numbers. The chart below shows the trend since January 2008.



Click on the image below for a larger view.

Check back next month to see if this trend continues to climb to levels we haven't seen since Down Payment Assistance was eliminated last Fall.

National Conventional Refis Rise in January

The number of Conventional Refinance loans originated in January rose to 284,872 from a December National Total of 187,638. Take a look at the chart below to see the monthly trend for the last year.

Click on the image below for a larger view.

We expect these numbers to continue to rise in February given the trend in interest rate reductions. Check back next month to see if we are right.

Fairfax County Home Sales Rise Slightly

The sales of homes in Fairfax County, VA rose in December 2008 compared to the same month one year ago. There were 927 homes sold in Fairfax county in December 2008 compared to 895 homes sold in December 2007. The chart below charts the monthly sales trend for all of 2007 and 2008.



Click on the image below for a larger view.

We will continue to monitor this area to see if the same trends continue for future months.

Orlando the Next Foreclosure Capital?

The Orlando metro area like many other Florida cities with already high foreclosure rates may see increases by another 14 or 15% in 2009. The combination of housing price floors that can't be found and an expected increase in job loss is further contributing to an already bad situation. The chart below shows the decline in median home prices in Orlando over the last year.

Click on the image below for a larger view.

When will this end? We will provide an update in a couple of months to see if these projections hold true.

Jumbo Mortgages Disappearing

The Great Loan Blog: Why can't I get a 5% 30Y Fixed Jumbo?

The link above from The Great Loan Blog, provides excellent insight about today's lack of jumbo conventional mortgage availability.

The chart below describes the monthly trend of the proportion of jumbo purchase mortgages relative to all conventional purchase mortgages since 2004.

Click chart for a larger image

Notice that the percentage of jumbos drops stepwise after December in years 2004 and 2005. The reason for these sudden drops for jumbos was that conforming loan limits on single family residences were increased in the following month. Conforming loan limits were increased in January 2005 from $333,700 to $359,650. Conforming loan limits were increased again in January 2006 to $417,000. This enabled $conforming mortgages to meet the demands for high priced home purchases. The irrational exuberance of home price increases in 2005 and 2006 eat away the purchasing power of conforming loans. The result created greater demand for the jumbo mortgages in 2005 and 2006. In 2007 there was no increase in the conforming loan limit, which is why you do not see the typical stepwise decrease in proportion of conventional mortgages that are jumbo. Also housing demand was slowing down by early 2007. By June - July 2007 the chart shows a mid year sudden drop in proportions of jumbo mortgages. This reflects the meltdowns in the secondary mortgage markets for these products. Investors lost interest in jumbo mortgages. That lack of a secondary market for jumbo mortgages persist to the present day.

If you are a mortgage originator, please feel free to post your product descriptions of jumbo level mortgage financing and the terms. Alternatively you can send your product availability to us by email to mortgageinfo@cbmiweb.com. Thanks!

Maricopa County Median Price Rises!

In Maricopa County, Arizona there was finally some encouraging news in early 2009. After seeing a steady decline of median home prices on a monthly basis in 2008, there was a modest increase in January 2009. The chart below shows the trend since January 2008.


Click on the image below for a larger view.

This is a bit of good news to market that really suffered last year.

Declare Disaster to Pay Your Mortgage?

The idea is no far fetched. According to an Associated Press report found on MSNBC's web site, Saint Lucie County Florida Commissioner Douglas Coward argues:

The declaration would act like a mini-stimulus plan, giving government officials access to a $17.5 million county fund usually reserved for natural disasters. The county would be able to put some of that money toward shovel-ready construction projects and loosen the bidding requirements so that local contractors got the jobs. That, in turn, could enable residents to pay their mortgages and stave off foreclosure.

It sure is ruff in Saint Lucie!

Update on Stockton, CA

Back in November, I was speculating that maybe Stockton, CA was starting to climb out of their foreclosure mess due to the increasing FHA originations. Let's take a look at what happened in the remainder of the year.

In November, I showed numbers through September where the monthly originations were continuing to rise each month. As you can see from the chart above, the numbers dipped in November following the elimination of Down Payment Assistance. However, the numbers rose again in December. So there continues to be positive signs of improvement. It will interesting to see what happens in the first quarter of 2009 for this distressed market.

DC Median Home Price Rises

A bit of good news from December 2008. The median home price in Washington, DC rose in December along with a slight increase in sales from the November numbers. The sales of home purchases rose to 3,123 in December from 2,767 in November.

The chart below shows the median home price trend for 2008.


These statistics may be showing signs of a shrinking inventory of foreclosure properties. I will be keeping an eye on these statistics in the coming months. If this trend continues over the next few months, a housing market recovery may be on the way in DC.