Mortgage lending fell to a 16 year low in 2011 according to a report by RISMedia. Of the 11.7 million loan applications filed in 2011, only 7.1 million resulted in loan originations which equals roughly 60%. That means, four out of 10 loan applications were rejected.
Additionally, there were fewer lenders on the market. In 2006, the report covered details from 8,900 lenders, whereas in 2011 it covered details from 7,632 lenders.
The result, lending for home purchases declined over 5% from 2010 to 2011 and lending for refinances declined 13% from 2010 to 2011.
Whereas loan approvals were down, FHA insured loans were up. The numbers indicate that in 2005 and 2006 only 3% of loans were insured by FHA. In 2009 the numbers peaked to 37% of loans were insured by FHA and in 2011, the numbers dropped to 31% of loans were insured by FHA. That means, 1 out of 3 loans are now being insured by FHA. Looking at total numbers, according to one expert, the FHA has 7.5 million loans outstanding and pays 12,000 claims per MONTH.
Looking at upside-down homeowners, roughly 23% of all homeowners owed more on their properties than the properties were worth.
No folks, you’re NOT alone!!