Fannie Mae (FNMA)

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Private MI Business Kept Growing in 3Q17, FHA Activity Lagged

By John Bancroft ... [e-mail]

IMFnews ... Thursday, Oct 12, 2017



Private mortgage insurers captured a larger share of the purchase-market during the third quarter of 2017 as the credit profile of new FHA production tilted toward riskier business, according to a new Inside Mortgage Finance analysis.

Fannie Mae and Freddie Mac securitized $64.59 billion of purchase loans with private MI coverage during 3Q17, a 28.5 percent jump from the previous period. That was substantially greater than the 9.5 percent increase in FHA purchase loans flowing into MBS guaranteed by Ginnie Mae.

Underwriting characteristics on the private MI purchase market remained high. The average credit score actually edged up a few points from the second to the third quarter and was higher than in 2016. But in the FHA space, credit scores in 2017 are a few points lower and average loan-to-value ratios and average debt-to-income ratios have inched higher.

Although the FHA was still the go-to program for first-time homebuyers, private MIs appear to be gaining ground.