Lending for mortgages dropped in 2011 as refinancings declined and many borrowers relied on loans backed by the Federal Housing Administration, according to bank regulators' 2011 data on housing loans.
"The total number of originated loans of all types and purposes reported fell by about 780,000, or 10 percent, from 2010, in part because of a 13 percent decline in refinancings," the bank regulators said today in a release in Washington of mortgage lending transactions in 2011 at 7,632 U.S. financial institutions covered by the Home Mortgage Disclosure Act.
"Home purchase lending also fell, but by a more modest 5 percent," last year, the regulators said.
The banking regulators' data for 2011 cover a period in which housing was deeply depressed and had not shown the improvement in prices and sales that have occurred in 2012. The group of banking regulators includes the Federal Deposit Insurance Corp., the Federal Reserve, the National Credit Union Administration, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, and the Department of Housing and Urban Development.
The 2011 data "reflect a continued heavy reliance on loans backed by the Federal Housing Administration insurance that began several years ago with the onset of problems in the mortgage market," the regulators said. The share of home purchase mortgages by the FHA was 31 percent in 2011, up from 7 percent in 2007 although down for 36 percent in 2010.
Home purchase mortgages backed by the Veterans Administration have risen to 8 percent in 2011 from 7 percent in 2010 and 3 percent in 2007.