Nearly four out of five Department of Veterans Affairs mortgages originated in 2016 by early HMDA reporters are finding their way into Ginnie Mae securities, LendingPatterns™ data show.
That’s an even higher percentage than Federal Housing Administration loans going into Ginnie Maes. I reported in my last blog that two of three FHA loans by lenders who have reported their 2016 Home Mortgage Disclosure Act data to ComplianceTech have become part of Ginnie Mae securities.
On the VA side, just shy of 200,000 mortgages were packaged into Ginnie Maes out of a total of 252,000 mortgages made by Early Look lenders as of July 27. That’s 79 percent.
Non-agency investors bought 37,000 of the originations (mortgage purchases are excluded from this analysis) and 16,000 or so stayed in portfolio. Freddie Mac was just on the board with 25 VA loans purchased, and Fannie Mae brought up the rear with just one VA loan to date.
The dollar volumes were pretty much the same as the loans by number. Three quarters (77 percent) of mortgage dollars found a secondary market through Ginnie Mae, while non-agency investors had 17 percent of the market and portfolio loans were at about seven percent.
Freedom Mortgage of New Jersey is the largest reporter of VA loans to date. They had fully a quarter of all market share, at $15.7 billion out of $61 billion reported. There were familiar faces in the second and third places, with Quicken Loans of Michigan second ($11 billion) and Wells Fargo Bank third at $8.3 billion.
Anecdotally I have heard that credit unions are quite interested in veterans mortgages. Of those that have reported to date, Pentagon Federal Credit Union has the largest volume. PenFed is 33rd, with a volume of $232 million, just above Bank of America, which reported $230 million. Ent Credit Union, Colorado Springs, Colo. is also on the board, with a little more than $100 million.
Taking a look at what kind of mortgages veterans were interested in, based on these early reporters, refinancings led handily with 65 percent of dollars and 68 percent by number. Less than two percent of both dollars and numbers of mortgages were for home equity loans, leaving the balance of more than 30 percent in purchase homes. The purchase figures were quite similar on the dollars side.
Sixty-four percent of VA loans went to whites (by numbers). Twenty-one percent went to minorities, with Blacks getting nearly half that volume at 11 percent.
The average VA first lien was $242,000. In my last blog I noted that the average FHA mortgage amount to date was less, at $189,000.
As we might expect, owner-occupied homes were 98 percent of loan dollars and just two percent for investor properties (an exception to owner-occupied is allowed for multifamily deals, but even there the veteran has to commit to occupying one of the units. A similar percentage went for one-to-four family properties.
Low- and moderate-income borrowers combined had about 11.7 percent share of the dollars. Upper-income borrowers took down 36 percent of the money, and middle-income borrowers 16 percent.
Just 19 percent of the finance went to jumbo mortgages, with the balance in conforming.
(Mark Fogarty is a journalist and analyst who has been covering the mortgage industry for more than 30 years.)