The Federal Financial Institutions Examination Council has released 2008 mortgage lending data from 8,388 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA).
Covered institutions include banks, savings associations, credit unions and mortgage companies, and the data include 14.2 million applications and originations and 2.9 million purchases, for a total of 17.1 million actions.
The 2008 HMDA data reflect the ongoing difficulties in the housing and mortgage markets, with decreases in the number of reporting institutions and loans. The number of reporting institutions fell nearly 3% from 2007, primarily because of a relatively large decline in the number of independent mortgage companies. The total number of originated loans of all types reported fell about 3.3 million, or 31%, from 2007.
While the number of reported first-lien conventional loans fell sharply from 2007 to 2008, first-lien loans backed by Federal Housing Administration (FHA) insurance increased dramatically. The number of such loans in 2008 rose by 169% over the 2007 level. The FHA's share of such loans expanded from 5.5% in 2007 to 19.6% in 2008.
First-lien loans backed by Veterans Affairs (VA) guarantees also increased markedly, increasing in 2008 by 48% over 2007's numbers. The VA market share increased from 1.5% in 2007 to 2.9% in 2008.
The incidence of higher-priced lending declined from 2007 to 2008. Among all HMDA-reported loans, about 12% were higher-priced in 2008, down significantly from the historic high point of about 29% in 2006 and 18% in 2007. Among higher-priced loans, rate spreads were lower than in previous years.
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. For conventional home-purchase lending in 2008, the incidence of higher-priced lending (not adjusted for lender or borrower-related factors) was 17.1% for blacks, 15.4% for Hispanic whites, 6.5% for non-Hispanic whites and 3.3% for Asians.
In addition, for both home-purchase and refinance lending in 2008, blacks and Hispanic whites had notably higher gross denial rates than non-Hispanic whites. The pattern for Asians was somewhat different, as the gross denial rate for this group was higher for home-purchase loans than for non-Hispanic whites, but about the same for refinance loans.