WASHINGTON, DC – March 27, 2012 – (RealEstateRama) — The increasing regulatory burden, growing compliance costs and ambiguity over rules still in the pipeline left real estate lending conditions mostly unchanged from the previous year, according to the American Bankers Association’s 19th annual Real Estate Lending Survey.
“Continued concern about forthcoming mortgage rules and the unknown future of Fannie Mae and Freddie Mac have increased lending uncertainty in an already sluggish market,” said ABA’s Executive Vice President Bob Davis. “Clarity through well-constructed rules that ensure credit availability for qualified borrowers is essential for the housing recovery.”
The 185 respondents, 86 percent of which were community banks with under $1 billion in assets, reported that broad conditions were mostly unchanged in 2011. Refinancings made up 63 percent of mortgage activity in 2011, down slightly from 66 percent in 2010 but unchanged from 2009.
Fixed rate mortgages remained the preferred loan structure representing 80 percent of originations in 2011, down from 81 percent in 2010. The 30-year fixed rate structure was the most popular, comprising 47 percent of all mortgages originated, 1 percentage point down from 2010.
Banks retained 41 percent of one to four family mortgages originated in 2011, up 3 percentage points from 2010. Twenty-seven percent of originations were sold directly to either Fannie Mae or Freddie Mac, the same as 2010, but up from 9 percent in 2006.
Sales to aggregators fell from 21.7 percent in 2010 to 17.3 percent in 2011, while sales to the Federal Home Loan Bank programs increased from 4.7 percent to 7.0 percent.
Nine percent of originations were to first-time homebuyers, down from 10 percent in 2010, but unchanged from 2009. Loan-to-values improved slightly in 2011 with 72 percent of loans made for 80 percent or less of the home’s value, up from 69 percent in 2010.
The delinquency rate fell slightly from 1.64 percent in 2010 to 1.55 percent in 2011, as foreclosures inched up slightly from 0.57 percent in 2010 to 0.68 percent in 2011.
The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its two million employees. The majority of ABA’s members are banks with less than $185 million in assets. Learn more at aba.com
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