Fannie Mae said it was able to acquire more purchase mortgages with LTVs above 80% last year, compared to 2011, because private mortgage insurers have become more competitive with Federal Housing Administration mortgage insurance.
In its 2012 annual report, the GSE noted that most
Meanwhile, FHA increased its mortgage insurance premiums in 2011 and 2012.
“These price changes improved the economics of purchasing private mortgage insurance as compared to purchasing FHA insurance and helped drive an increase in our acquisition of loans with LTV ratios over 80%,” Fannie said in its annual report that was released Tuesday morning.
Fannie acquired $171.4 billion in purchase mortgages in 2012, compared to $125 billion in the previous year. However, the GSE does not disclosure the number or amount of purchase loans with LTV ratios above 80%, a company spokesman said.
Nevertheless, Fannie points out in its annual report that the home purchase loans with LTVs greater than 80% have a “strong credit profile with weighted average FICO scores of 755.”
The average FICO score of a FHA homebuyer is 701.
The GSE acquired $832.2 billion in single-family loans from lenders in 2012, the highest since 2003. Only 20.6% of the 2012 vintage are purchase mortgages.
