Almost one of every three mortgage applications were denied in 2008. That 3% worse than 2006.
To intensify matters, mortgage applications were down 33% over 2007 and 50% the year before.
Piggy-back mortgages where borrowers borrowed the down payment are off the table for all practical purposes. Only 98,000 were funded in 2009. That's down from 1,300,000 in 2006.
I'd like to believe that investors scaled back the availability of 80/20 combo loans because they learned how unaffordable the mortgages eventually became for many homeowners when combined with declining real estate values. Sad to say, I doubt that's the reason.
But there's still good news for borrowers thinking of using loans backed by the Federal Housing Administration. FHA mortgage approvals accounted for 21% of all loans made in 2008. In 2005, only 5% were FHA home loans.
When it comes to low down payments, the FHA loan program outshines its competition. Learn more about FHA mortgage loans here.
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Read the full article here by Alan Zibel (Associated Press)
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FHA loans are great, but unfortunately in our market, L.A. at the bottom of the totem pole in multiples. We really have to spruce up our offers in competition with 20% down buyers.