Ginnie Mae mortgage-backed securities issuance dropped 36% in the fourth quarter from the prior quarter to the lowest level since 2008, according to newly released agency data.
Issuers securitized $76 billion in Federal Housing Administration and other government-backed loans in the final quarter of 2013, down from $119 billion in 3Q.
Ginnie MBS issuance in December fell to $22.3 billion, which is the lowest level since March 2010.
The bulk of the decline comes from the sharp drop in refinancings during the fourth quarter, which is evident from Fannie Mae and Freddie Mac’s monthly reports.
Loan volumes have been declining across all single-family loan programs, but Federal Housing Administration loan production is falling at a particularly fast rate.
FHA endorsements have fallen steadily from 105,955 in July to 61,300 in November, the latest data from HUD show.
FHA purchase loan endorsements have dropped from 66,555 in July to 47,900 in November.
FHA loans along with loans guaranteed by the Department of Veterans Affairs and U.S. Department of Agriculture back Ginnie Mae securities.
Historically, the split between FHA, VA and USDA purchase originations was around 80% (FHA) and 20% (VA/USDA), according to mortgage consultant Brian Chappelle.
“It was about 66%-34% recently. I would bet it is now even closer to 50%-50%,” he says. The consultant is a co-founder of Potomac Partners in Washington.