Driven by a 67% increase in refinancings, the total number of loans originated in 2009 increased by about 1.8 million, or nearly 25%, from 2008, according to Home Mortgage Disclosure Act (HMDA) data released this week by the Federal Financial Institutions Examination Council (FFIEC). The data cover nearly 15 million loan applications (nearly 9 million of which resulted in loan originations) and 4.3 million loan purchases.
The HMDA data reflect a growing reliance on loans backed by Federal Housing Administration (FHA) insurance during the recent mortgage market difficulties. For home purchase lending, the FHA's share of first-lien loans increased from 7% in 2007 to 26% in 2008 and to 37% in 2009.
First-lien lending for home purchases backed by Veterans Affairs (VA) guarantees also increased markedly, although VA-backed lending is much smaller in scope than FHA-backed lending. The VA market share of first-lien home purchase loans increased from 2.7% in 2007 to 4.9% in 2008 and to 6.7% in 2009.
The number of reporting institutions fell 3% from 2008, primarily because of an approximately 13% decline in the number of mortgage companies reporting data.
Regarding the disposition of applications for both home-purchase and refinance loans in 2009, blacks and Hispanic whites had notably higher gross denial rates than non-Hispanic whites, HMDA data show. The pattern for Asians was somewhat different, as their gross denial rate was similar, for both home-purchase loans and refinance loans, to the corresponding gross denial rates for non-Hispanic whites.