Mortgage Refinance Applications Jump & Mortgage Refinance Originations Slump

Given reports of record low mortgage rates, we would expect a return to the mortgage refinance boom. News reports indicate a large increase in refinance applications. The data does not show that the increase in mortgage refinance applications result in increases for mortgage originations. Conventional refinance mortgages continue to show a steady decline.

FHA Originations Increase in December

FHA Originations increased by over 9,000 in December (to over 130,000 for month) from November (around 121,000). It shall be interesting to see if this is a trend that continues for future months. The month of November was the first month of statisitics after the elimination of Down Payment Assistance. This should be interesting to watch over the next couple of months. The chart below shows the monthly trend in originations.

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Your Local Bank Provides Better Mortgage Deals.

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The proportion of high cost mortgages by banks in their local metropolitan area markets was compared to the proportion of high cost mortgages originated by banks in their non-local metropolitan areas. Home Mortgage Disclosure Act (HMDA) data was used in the study. Originated mortgages having a reportable rate spread was classified as a high interest rate (or high cost) mortgage. A bank’s mortgage was local when the mortgage secured a property located in a metropolitan area where the bank had at least one retail branch office. A bank’s mortgage was non-local when the mortgage secured a property in a metropolitan area where the bank had no retail branch office. The finding (see chart) was that from 2004 through 2007 banks were more than two times more likely to originate high cost mortgages in metropolitan areas were they do not have branch offices.

Carpetbaggers!

Monarch Home Funding Gains in November

Back in August, I reported on the growth of Monarch Home Funding's market share in Virginia Beach. They experienced a bit of a dip in market share for Veteran's Administration mortgages in October dropping to 2.47% of the market. They have bounced back in November rising back to 5.27% of the market. The chart below shows this increase in market share.

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This is quite an accomplishment given that the Veteran's Administration mortgage market slowed for Virginia Beach in November. The total of Veteran's Administration mortgage originations dropped to 517 from 702 in October. The chart below illustrates the dip in November originations.

Where Have the Jumbo Mortgages Gone? - Part 2

Last week we reported on the decline of conventional mortgage origination and especially jumbo mortgages. Our study focuses on what is happening in mortgage markets. We have some additional news explaining additional causes of the decline of the conventional jumbo mortgage market. Blame Jumbo size FHA mortgages!

Early this year, the Economic Stimulus Act of 2008 (Public Law 110-185) included an increase of FHA Mortgage loan amount limits. One result of this law was that many mortgages that may have been financed only through conventional mortgages (typically known as jumbo mortgages) became eligible for FHA mortgage insurance. The chart shows the monthly increases in the number of jumbo size (mortgages $417,000 or more) since 2006. The jumbo size FHA mortgages prior to the law (before February 2008) include mortgages on two, three, or four family residential units which allowed for higher mortgage loan limits cases.

An FHA mortgage for everybody!

Note!: Blogger image upload was not working for us today so we placed the chart on our web server.

FHA Average Mortgage Amount Plateaus

After several months of increasing average loan amounts for FHA, the national average loan amount has stopped growing the last few months.

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This is an interesting trend considering the FHA loan limit was raised to over $729,000 in some high cost counties. Take a look at what is going on in Fairfax County, Virginia (FHA loan limit of $729,750). After an initial increase this year, the average amounts have been declining the last few months. Is this a function of further declining home values or something else?

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Where oh Where Has Our Jumbo Mortgage Business Gone?

In recent months the percentage of conventional home purchase jumbo mortgages have been increasing.
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But!

In recent months the number of all conventional mortgages including jumbo mortgages have fallen off a cliff!

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Navy Federal Originations Double in Fairfax County

Navy Federal Credit Union more than doubled their Conventional Mortgage Originations for Fairfax County, Virginia in October from the September numbers. The chart below shows the monthly origination numbers for 2008.

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This increase increase in originations led to a significant increase in their Fairfax County market share, as the chart below shows.

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This is an important development for Navy Federal Credit Union , the world's largest credit union. Navy Federal Credit Union has announced an even larger commitment in mortgage lending for 2009. Click here to view the Navy Federal Credit Union press release. We will be following this in the coming months to see if their monthly originations and market share continue to rise.