| Title: | Second Half 2006 Mortgage Originations Survey Shows Shift to Fixed Rate Products from Adjustable Rate Products |
| Source: | MBA |
| Date: | 7/3/2007 |
Contacts:
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WASHINGTON, D.C. (July 3, 2007) - First mortgage originations shifted dramatically to fixed rate products in the second half of 2006 from the first half of
2006 according to the Mortgage Bankers Association's (MBA's) Mortgage Originations Survey released today.
Key findings from the survey include (percentages are based on dollar volume of originated loans):
- For first mortgages, fixed-rate loans- including interest only (IO) loans- accounted for 46.2 percent of loans (60.5 percent
based on the number of loans) in the second half of 2006 compared to 43.3 percent (54 percent based on number of loans) in
the first half of 2006.
- IOs accounted for 28.5 percent of originations in the second half of 2006 compared to 25.6 percent in the first half of
2006. However, fixed rate IOs accounted for 21.2 percent of all IOs in the second half of 2006 compared to 24.3 percent in
the first half of 2006.
- First-time home buyer purchases represented 26.9 percent of home purchases in the second half of 2006, unchanged from 26.9
percent in the first half of 2006. Their average loan amount was $197,044, which was less than the average loan amount of
$228,547 for non first-time home buyers.
- Of the originations made in the second half of 2006, 19.9 percent were for single-family attached homes, 75.1 percent for
single-family detached homes, 1 percent for manufactured and mobile homes and 4 percent for 2-4 unit structures. Approximately
55.4 percent of single-family attached home originations were for condos or cooperatives, with the remainder for other single-family
attached properties such as townhouses, duplexes and row houses.
- From the first half of 2006 to the second half of 2006, reverse mortgage dollar volume increased 9.5 percent. FHA's Home
Equity Conversion Mortgages (HECMs) increased by 6.6 percent and other reverse mortgages decreased 9.8 percent, while the
number of reverse mortgage loans increased 19.1 percent. This result was driven by a 9.8 percent decrease in (typically)
large dollar balance reverse mortgages combined with a 6.6 percent increase in smaller balance HECM loans. However, HECM loans
comprised 87.8 percent of the dollar volume of reverse mortgages and therefore, had a proportionately larger effect on the
overall reverse mortgage trend.
- Compared with the first half of 2006, the second half of 2006 saw origination volume of all second mortgages decrease 5.8
percent. Illustrating the move to fixed-rate loans, closed-end seconds increased 6.3 percent while open-end seconds or home
equity lines of credit (HELOCs) decreased 11.6 percent.
- The percentage of second mortgage originations that were closed-end increased to 34.2 percent of dollars and 43.3 percent
of loans in the second half of 2006 from 33.7 percent of dollars and 41.6 percent of loans in the first half of 2006.
Due to continuing consolidation, the survey included 84 participants, including almost all of the top 30 originators. During
the second half of 2006, survey participants originated $681 billion in first mortgages and $163 billion in second mortgages.
If you are not a member of the media and have questions about the Mortgage Originations Survey, please contact Vincent Varma
at (202) 557-2831 or Joel Kan at (202) 557-2925.
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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry
that employs more than 370,000 people in virtually every community in the country. Headquartered in Washington, D.C., the
association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand
homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and
fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety
of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies,
mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending
field. For additional information, visit MBA's Web site: www.mortgagebankers.org.