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2008 mortgage trend info available
WASHINGTON (10/1/09)—Data on mortgage lending transactions by credit unions, banks and thrifts throughout the United States in 2008 is now available through the Federal Financial Institutions Examination Council (FFIEC). The number of reporting institutions fell to 8,388, about 3% less than the 8,610 covered by the Home Mortgage Disclosure Act (HMDA) the year before. The drop was attributed primarily to a relatively large decline in the number of independent mortgage companies. The FFIEC is comprised of the National Credit Union Administration, Federal Reserve Board, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and Office of Thrift Supervision. The Credit Union National Association (CUNA) is currently analyzing the just-released mortgage lending data, particularly credit union information, and will report any significant trends. In general terms, an FFIEC release noted that the 2008 HMDA data reflect ongoing difficulties in the housing and mortgage markets, with decreases in the both the number of reporting institutions and the number of loans written. The total number of originated loans of all types reported fell about 3.3 million, or 31%, from 2007. However, the story does not stop there. While the number of reported first-lien conventional loans fell sharply from 2007 to 2008, first-lien loans backed by Federal Housing Authority (FHA) insurance increased dramatically, the FFIEC noted. In fact, FHA loans rose 169% in 2008 and the FHA’s share of such loans expanded to 19.5% in 2008, up from 5.5% the year prior. First-lien loans backed by Veterans Administration (VA) guarantees also increased markedly. The number of VA-guaranteed loans in 2008 increased by 48 percent over the number in 2007. The VA market share increased from 1.5%in 2007 to 2.9% in 2008. The incidence of higher-priced lending declined in 2008, but racial disparity remained. The FFIEC reported that among all HMDA-reported loans, about 12% were higher-priced, down significantly from the historic high point of about 29% in 2006 and 18%t in 2007. However, the 2008 HMDA data, similar to the data from earlier years, indicate that black and Hispanic white borrowers were more likely, and Asian borrowers less likely, to obtain higher-priced loans than were non-Hispanic white borrowers. Mike Schenk, CUNA vice president of economics and statistics, noted it will take time to cull the enormous HMDA database. However, he said CUNA expects the numbers to show that credit unions, compared to other lenders, continue to be more likely to approve mortgage loan applications, and that their relatively high approval rates will continue to stand out across the income spectrum and in all key ethnic groupings. Schenk said the FFEIC numbers also historically have shown credit unions to be much less likely to saddle consumers with high-cost loans and that credit unions remain true to their mission: compared to other lenders, credit unions reported a larger share of the total mortgage lending to low/moderate income consumers. "My expectation is that, at a minimum, the new numbers will show a continuation of these impressive credit union results,” Schenk said Thursday. He anticipated the FFEIC data will reflect that credit unions have remained active, responsible lenders during the ongoing housing downturn, which has caused many other lenders to significantly tighten underwriting standards and substantially curtail or completely abandon the mortgage market. "Credit unions were not contributors to the subprime mess, and have remained active, responsible lenders - the FFIEC data should reflect this fact," the CUNA economist said.
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