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High LTV Conforming Loans not Threatening FHA
Monday, December 7, 2015
The government sponsored enterprises'' (GSE's)
introduction of 97 percent loan-to-value (LTV) mortgages, implemented by Fannie
Mae' in late 2014 and by Freddie Mac in the spring of 2015, has apparently done
little damage to the government guarantee sector's dominance in that market
place. Black Knight Financial Services' most
recent Mortgage Monitor points out
that the Federal Housing Administration (FHA) and the Veterans' Administration
(VA) loan programs have continued as the primary drivers in that expanding segment
of purchase mortgage lending.
Low downpayment lending, that is
mortgages with a 95 percent or higher LTV ratio, were up 20 percent in the
third quarter of 2015 compared to the same period in 2014 while the overall
purchase market expanded by only 13 percent.
Despite this increase the GSEs' new products garnered only 3 percent of
those low down-payment originations.
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