Government Loans' Market Share Growing

A Mortgage Bankers Association survey shows that 20.1% of single-family originations in the second quarter were guaranteed by the Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service, up from 11.5% in the first quarter. "This survey confirms the increased popularity of FHA," said MBA senior economist Orawin Velz. She estimates FHA's market share hit 25% in the third quarter and it will go even higher in the fourth quarter. The MBA Mortgage Origination Survey also shows the conventional prime loans that Fannie Mae and Freddie Mac purchase are declining in terms of market share. Prime loans comprised 75.9% originations in the second quarter, down from 82.7% in the second quarter. In the second quarter, only 2.9% of originations were subprime loans and 1.1% were Alt-A loans.