Wednesday, March 28, 2012

Real Estate Lending Conditions Unchanged in 2011

Real estate lending conditions were mostly unchanged from 2010 to 2011, according to ABA’s 19th annual Real Estate Lending Survey.

Refinancings made up 63% of mortgage activity in 2011, down slightly from 66% in 2010. Fixed rate mortgages remained the preferred loan structure representing 80% of originations in 2011, and the 30-year fixed rate structure remained the most popular, comprising 47% of all mortgages originated last year.

Banks retained 41% of one to four family mortgages originated in 2011, up 3 percentage points from 2010. Twenty-seven percent of originations were sold directly to either Fannie Mae or Freddie Mac, the same as 2010. Sales to aggregators fell from 21.7% in 2010 to 17.3%, while sales to the Federal Home Loan Bank programs increased from 4.7% to 7.0%.

ABA EVP Bob Davis attributed the survey results to the increasing regulatory burden and ambiguity over rules still in the pipeline. “Continued concern about forthcoming mortgage rules and the unknown future of Fannie Mae and Freddie Mac have increased lending uncertainty in an already sluggish market,” he said. “Clarity through well-constructed rules that ensure credit availability for qualified borrowers is essential for the housing recovery.”

Read the press release.

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