Fannie Mae (FNMA)

[navycmdr]

GSE PMI Business on the Rise; Growth in Higher LTV Loans

By John Bancroft [e-mail]

Fannie Mae and Freddie Mac securitized $59.07 billion of single-family loans with private mortgage insurance coverage during the third quarter of 2015, reflecting the increase in purchase-mortgage production, according to a new analysis and ranking by Inside Mortgage Finance.

The flow of PMI-insured loans to the GSEs? mortgage-backed securities program was up 12.3 percent from the second quarter, and it was likely the biggest such volume since the housing market collapsed in 2008.

The increased volume of privately-insured mortgages came from the surge in purchase-lending activity, which accounted for 53.1 percent of the GSEs? third-quarter business. Private MI coverage is much more common on purchase mortgages, which typically have higher loan-to-value ratios than refinance loans.

Meanwhile, the GSEs' high-LTV mortgage programs gained traction during 3Q. Fannie and Freddie securitized $2.23 billion of insured purchase loans with LTV ratios of 96 or 97 percent, a 29.6 percent increase from 2Q.