Page 57 - The GSE Report March-April 2018

GINNIE MAE
MJARN.U-ARPYR.20210818
Mortgage borrowers are paying higher interest rates for FHA-insured mortgages compared to conventional mortgages for the first time in history, according to Ellie Mae. In March, the average rate for an FHA loan hit 4.73%, the highest average rate since 2013.
“The FHA loan is not the default low-down payment mortgage choice for buyers of homes anymore,” wrote Growella.com’s Dan Green. “There are other, less-expensive options. For buyers with above-average credit buying single-family homes, conventional loans may be a better choice. 3% down payment loans such as [Fannie Mae’s] HomeReady® and [Freddie Mac’s] HomePossible®, save money as compared to the FHA’s low-down payment option.”
In February, 68% of mortgage loan originations were conventional loans while FHA originations remained flat at 28%, according to Ellie Mae.
Millennials’ overall share in the purchase market increased to 45% of all closed loans, up from 43% in December. “According to the U.S. Census, Millennials are now officially the largest group of homebuyers in the U.S.,” said Joe Tyrrell, Ellie Mae EVP of corporate strategy. “Despite rising interest rates, we’re continuing to see Millennials exercise their purchasing power across the United States as they represent 45% of total closed purchase loans in February. “And with the spring home-buying season now underway, we’ll see if the activity increases for this growing group of homebuyers.” (HousingWire, Kelsey Ramirez, 04/05/18; Growella.com, Dan Green, 04/20/18)
HUD’s Inspector General finds FHA incorrectly insured $1.9 billion of mortgages in 2016
In an audit of FHA-insured loans origintaed in 2016, HUD’s Inspector General concluded:
FHA insured an estimated 9,507 loans worth $1.9 billion, which were not eligible for insurance because they were made to borrowers with delinquent Federal debt or who
were subject to Federal administrative offset for delinquent child support. We reviewed a statistical sample of 60 loans from a universe of 13,927 FHA-insured loans that closed in 2016 and also had data on their related borrowers in the U.S. Department of the Treasury’s Do Not Pay databases. We verified that 47 of the 60 sample loans were made to borrowers who were barred by Federal requirements. We used these results to project the total number and value of ineligible loans insured by FHA,
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