CHLA Releases Data Showing Non-bank Dominance in FHA Loan Origination is not a New Phenomenon
Non-bank Ginnie Mae Share has Soared Recently; but FHA market share was already high
Current Period of Non-bank FHA dominance corresponds with Historically Low Defaults
Contact: Scott Olson For Immediate Release
571-527-2601 May 4, 2017
The Community Home Lenders Association (CHLA) today released data and graphs rebutting the popular misconception held by many that the significant GNMA market share growth of non-bank mortgage lenders over the last six years reflects a new or significantly increased role for these independent mortgage bankers (IMBs) in FHA lending. CHLA released the data as the only national association exclusively representing non-bank mortgage bankers.
“Independent Mortgage Bankers have long played a critical role in promoting homeownership, with non-bank FHA loan origination market share consistently averaging well over 50% of the market.” said Scott Olson, CHLA’s Executive Director. “CHLA is releasing this data so that the significant recent growth in non-bank GNMA issuance is understood for what it is – non-banks continuing their dominant role as FHA loan originators – but increasingly also keeping the servicing through GNMA issuance.
CHLA released data confirming that the non-depository share of Ginnie Mae issuance over the last six years has been significant – increasing from 12% in FY 2010 to 73% in FY 2016. But over the same six year period, the non-depository share of FHA rose only from 57% to 85%. And the enclosed data shows the non-bank share of FHA loan origination has consistently averaged over 50% for the last 35 years, including levels close 70% over different time frames. The data conclusively demonstrates the the important role of independent mortgage bankers in FHA loan origination is not a new phenomenon.
“Independent mortgage bankers have long played a critical role in the FHA loan origination market,” said William Giambrone, CHLA President and Chairman and CEO of Platinum Home Mortgage. “But over the last few years we are seeing two things – first an acceleration of IMB origination dominance, and secondly an emerging dominance in FHA loan servicing, as the banks leave that market and non-banks have stepped in to be Ginnie Mae issuer/servicers.”
This dominance in recent years of both FHA loan origination and servicing by IMBs coincides with FHA default levels currently being at historically low levels. For example, the last several years have seen the lowest early default rates in the 18 years that Neighborhood Watch has been in existence.
“FHA is the engine that drives first time homeownership in this country – and independent mortgage bankers are the engine that drives FHA loan origination,” said Bill Giambrone, CHLA President and Chairman and CEO of Platinum Home Mortgage. “We urge decision makers in Washington to keep these important facts in mind as they consider housing policy.”
Following is data supplied by FHA and GNMA:
CHARTS COMPARING NON-BANK SHARES OF FHA AND GINNIE MAE SINCE 2010
Non-Depository Share of Ginnie Mae
* 2010 = 12%
* 2011 = 14%
* 2012 = 25%
* 2013 = 34%
* 2014 = 49%
* 2015 = 65%
* 2016 = 73%
Non-Depository Share of FHA
* 2010 = 57%
* 2011 = 58%
* 2012 = 64%
* 2013 = 62%
* 2014 = 71%
* 2015 = 80%
* 2016 = 85%