FHA/VA Still Dominates High-LTV Lending
In December, the Data & Analytics division of Black Knight Financial Services looked at high loan-to-value (LTV) mortgage loan products (greater than 95% LTV), in light of the GSEs’ reintroduction of high-LTV products at the end of 2014 (3% down conventional loan), coupled with the 50-basis-point reduction in FHA annual mortgage insurance premiums earlier this year. Despite the renewed availability of GSE high loan-to-vale products, the data from the company’s latest Mortgage Monitor Report shows that high-LTV lending is still primarily the province of the FHA/VA. “High-LTV purchase mortgage originations are up 20% in the third quarter over last year,” said Black Knight Data & Analytics Senior Vice President Ben Graboske. “That’s compared to an approximately 13% increase for the purchase market overall. High-LTV products now account for 23% of all purchase originations.” What’s particularly interesting in today’s market is how heavily the high LTV lending is dominated by FHA/VA. Back in 2007, the GSEs made up over 45% of high-LTV mortgage loan purchase originations, while FHA/VA lending made up roughly one-third of mortgage loan purchase originations. “Since 2009, FHA/VA products have made up over 90% of high-LTV purchase originations every year, and the same is true in 2015, even with the GSEs having reintroduced their own 97% LTV products,” said Graboske. “In fact, those products have accounted for less than 3% of all high-LTV originations so far this year.” “As we reported last month, recent increases in purchase lending have been driven primarily by higher-credit-score borrowers, and these high-LTV products are no exception,” said Graboske. “We’ve seen average credit scores on high-LTV FHA/VA loans rise six points from last year to 706. Of course, scores for GSE and...Mortgage Loan Rates Set to Increase?
Janet Yellen, the chairwoman of the Federal Reserve hinted Wednesday (Dec 2nd) that economic conditions were looking favorable for the Federal Reserve to possibly raise interest rates this month at their Open Market Committee meeting (December 15-16). “The economy has come a long way toward the (Federal Open Market Committee’s) objectives of maximum employment and price stability,” Yellen said during a speech to the Economic Club of Washington. Mortgage loan interest rates are near an all time low and the federal funds target rate has not been increased since 2006. The federal funds rate has been at .25% since the beginning of 2008 and analysts and investors are predicting a .25% – .50% increase come the December 15th meeting. If the Fed does increase the target rate come the December meeting, mortgage loan interest rates are likely to...FHFA Announces 2016 Maximum Conforming Mortgage Loan Limits
The Federal Housing Finance Agency recently announced that maximum conforming mortgage loan limits for mortgages purchased by Fannie Mae and Freddie Mac will remain unchanged in 2016, with the exception of certain designated high-cost counties which will increase. No changes to the conforming mortgage loan limits were observed in the state of Florida; the conforming mortgage loan limit in the state of Florida is $417,000, with the exception of Collier County and Monroe County which remained at $448,500 and $529,000 respectively. The conforming mortgage loan limit for Lee County is $417,000. There were 39 high-cost counties across the country which will undergo a limit increase in 2016: the majority of which were located in Tennessee and Colorado. A complete list of conforming mortgage loan limits for each county throughout the country is available on FHFA’s website:...Connect With Us
