GSEs and GNMA Continue their 'Lock' on the Market

Fannie Mae, Freddie Mac and GNMA had a combined "purchase" market share of 98% in the first quarter, according to new figures compiled by National Mortgage News. The share number represents a slight decline from the near monopoly (99%) they had on the business last year. NMN derived its market share numbers by taking the loan purchases of the GSEs (and the bond issue of GNMA, which reflects FHA/VA production) and dividing it by industry-wide originations in a given time frame. It's no secret to seller/servicers that these three entities dominate the secondary market, setting loan standards for 60 million borrowers. The numbers also indicate that very few lenders actually keep whole loans on their balance sheets except for jumbo mortgages, and, perhaps, conventional ARMs. Ten years ago Fannie and Freddie had a combined purchase market share of about 50% with GNMA at a meager 5%. (For the full story see this week's paper edition of NMN.)