How FHA is Driving Conventional Refi Demand, Even as Rates Rise


Posted To: MND NewsWire

FHA’s mortgage share, which surged following the housing crisis and helped shore up the market, is now in a steady decline. However, the loans written during that period of high volume may become, in a round-about way, good news for conventional mortgage refinancing. Sam Khater, CoreLogic’s Deputy Chief Economist, writes in the company’s Insights blog that FHA’s share of the purchase market skyrocketed from a low of 4 percent in February 2007 to a peak of 39 percent in November 2009. As private lenders fled, mortgage insurers collapsed, and the government sponsored enterprises Fannie Mae and Freddie Mac tightned lending standards, FHA became about the only option for low downpayment loans. Since that 2009 peak the FHA’s purchase market share has declined to 20 percent (as of last September…(read more)

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