Government Insured Share of mortgage applications Tops 36%, New Record

MBA Reports Government Insured Share of mortgage applications Highest since 1990, Now at 36 percent

Washington, D.C.
July 09, 2009

The government-insured (FHA and VA loans) share of mortgage applications was 35.9 percent in June 2009, the highest level since November 1990, according to the Mortgage Bankers Association.

Based on data from MBA's Weekly Mortgage Applications Survey, the government-insured share jumped from 25.7 percent a month earlier and 27.0 percent in June 2008. Since the MBA survey's inception in January 1990, the lowest recorded share was 5.8 percent in August 2005.

The government-insured share of purchase applications in June was 38.6 percent, up from 27.8 percent one year ago. The government-insured share of purchase applications has averaged 36.6 percent to date in 2009, compared to an average of 21.8 percent during the same period in 2008. The low point was in August 2005 when it was 6.8 percent.

"A primary reason government-insured loans have retained a high share of the purchase market is that these loans typically require lower down payments than conventional loans," said Orawin Velz, MBA's Associate Vice President of Economic Forecasting. "In addition, lending standards tend to be tighter for conventional loans, especially for loans that require private mortgage insurance."

"While the government-insured share of purchase applications has remained elevated, the government-insured share of refinance applications has been volatile. The share hit a record high of 38.4 percent in October 2008. As mortgage rates fell sharply between mid-November through early May, refinance activity surged for conventional loans. This surge in conventional refinance applications dominated the market, causing the share of FHA refinance applications to fall below 20 percent for most of this year. Recent increases in mortgage rates have caused conventional refinance activity to drop much more sharply than government-insured refinance activity due to a combination of credit and LTV requirements. As a result, the government-insured share of refinance applications climbed to 33.6 percent in June," Velz said.

So now government insured mortgages are the sub-prime mortgage lending... That means a greater number of future defaults/foreclosures will be from FHA mortgages. Our opportunities are to take over these properties "subject to" the existing 30 year financing.

Reggie Lal speaking Wednesday October 21st

Wealth Building Strategies in the Current CA Market

If you missed Reggie Lal speaking at the SDCIA in August; you really should take the opportunity to catch him at the InvestClub for Women meeting this Wednesday evening. Here's the link for more information:

http://womensinvestclub.com/ReggieLal.aspx

Topics Reggie's Going To Cover:

• Successful Deal Structuring
• Creating Cashflow in this Market
• Where To Invest
• How to Pre-Screen and Evaluate Deals
• Creative Methods of Financing Properties
• CA Market Update
•  Raising Private Money - How to Fund your Deals
• Common Mistakes Investors Are Making and How to Avoid

Reggie is a straight-talking guy who will tell you exactly what he does, how he does it & how you can to. He bought fifty-one (51) houses last year, one at a time.

Reggie's someone you can really learn from because he's not trying to get into your wallet or purse.

He will share that he's putting on a one-day class November 21st locally titled:

"Finding Money in Today’s Market & IRA Investing
(The Best Kept Secret in America Today !)

Build your own war chest of funds and take advantage of the greatest buying opportunity of our time !

http://www.bethesmartinvestor.com/Public/Events/index.cfm?semID=180&view=1&requestTimeOut=100

BTW, he will have a very handsome colleague teaching a section on creative financing... 

Jack Miller

I'm sorry to report sad news. Jack Miller, one of my mentors, passed at 8:33 am on Friday, October 9. Jack was diagnosed with cancer in June and fought valiantly to beat it. We all believed he would overcome it but he lost the fight. He will be missed by all.

Here is a final message from Jack:

To my Friends, Students and Subscribers,

"I have concluded that the treatment for my illness will not be successful. However, I am thankful that I have had the friendship and support of many of you. It has been rewarding for me to see you grow and prosper and I hope I was of some help in that process. It is my hope that you will continue your efforts in the most ethical, enjoyable and profitable manner. Best of luck to you all."

Per Jack's wishes, there will be no funeral.

Many people want to express their sympathy and respect directly to the Miller Family, but they just need time and space for now. Please do not call at this time or send flowers. You may send your condolences to the email above at GoodbyeJackBaby@gmail.com .

The Miller family would like to thank you for all the years of support and friendship. 

I remind everyone that my favorite mentors: John Schaub, Peter Fortunato & Jimmy Napier have cut back on their teaching schedules. No one knows how much longer they will continue to teach and you should do yourself a favor to take their classes. John Schaub just taught a class last weekend. It's the first one I've missed in years and only because of illness. You'll be real estate sick if you don't take at least one of the classes from the masters!