HMDA Data Sheds Light on FHA Lending's Growth

The 2008 Home Mortgage Disclosure Act data show that Federal Housing Administration lending surged in the second half of 2008 and by December FHA had a 38% share of the home purchase market and 25% share of the refinancing market. "By the end of 2008, nearly one-half of home-purchase loans and one-quarter of refinanced loans were backed by either FHA or the VA," according the Federal Reserve Board analysis of the HMDA data. Fed researchers noted that Fannie Mae and Freddie Mac were losing ground to FHA and VA because the GSEs raised their underwriting fees in 2008 and the private mortgage insurance companies raised their prices and limited coverage. "Fannie Mae and Freddie increased their market share in 2007 but relinquished much of those gains during 2008," the report says. Overall, FHA, VA and Rural Housing Service combined had a 25.7% share of the mortgage market in 2008, up from 7.5% in 2007.