Thursday, June 25, 2009
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!
Tuesday, June 23, 2009
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?
Thursday, June 18, 2009
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.
Friday, June 12, 2009
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.
Wednesday, June 10, 2009
Wednesday, June 3, 2009
Click Chart for Larger View and More Statistics
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.