Entries by Edward Pinto

Film Suprime 2.0: Doubling Down on Disaster

The central role housing policy played in causing the financial crisis has been gaining greater and greater acceptance, but much more remains to be done as new efforts are underway to double down on disaster. Earlier this year, my colleague Peter Wallison came out with his new book Hidden in Plain Sight: What Really Caused the World’s […]

First-Time Buyer Mortgage Share and Mortgage Risk Indexes (FBMSI and FBMRI) for February 2015

SUMMARY: First-time buyers accounted for nearly 56 percent of primary owner-occupied home purchase mortgages with a government guarantee, up slightly from the prior February. The Combined FBMSI (which measures the share of first-time buyers for both government-guaranteed and private-sector mortgages) stood at an estimated 50 percent. The number of primary owner-occupied purchase mortgages going to […]

Androscoggin’s Wealth Building Home Loan

Androscoggin Bank of Lewiston, ME introduced the first market rate program Wealth Building Home Loan with a soft launch back in November (called the Wealth Builder Home Loan).  The response has been enthusiastic—5 closed loans and a total pipeline (including closed loans) of $3.3 million in the dead of winter—impressive results for a $700 million […]

National and State Mortgage Risk Indices Update

The National Mortgage Risk Index (NMRI) for Agency purchase loans rose in November to 11.69%, up from the average of 11.29% for the prior three months (revised).  The risk indices for Fannie Mae, Freddie Mac, the FHA, and the VA all hit series highs in November. “The increase in risk for all the major government […]

National and State Mortgage Risk Indices

Notwithstanding statements to the contrary by many public officials, credit conditions today are not tight when compared to the early-1990s (today is generally much looser) or early-2000s (some tighter, some not).  As a result, recent announcements by public officials to spur looser lending are cause for great concern. Below is a slide which chronicles credit […]

Creating More Homeowners Without Building a Crisis

Wealth Building Home Loans are fixed-rate, 15-year loans that build equity much faster than a 30-year mortgage. By William M. Isaac and Edward Pinto Sales of existing homes in August were down 5.3% year-over-year. The housing lobby says credit is too tight. The commissioner of the Federal Housing Administration and the director of the Federal Housing […]

Rave reviews for the Wealth Building Home Loan

The Wealth Building Home Loan (WBHL), a new approach to home finance, opened to rave reviews at the American Mortgage Conference held September 8-10.  Six leaders of national stature made favorable comments from the podium. Lewis Ranieri, considered the “godfather” of mortgage finance, in his keynote address praised the WBHL:  “Fundamentally, what I find exciting is the […]

Access to early 20th century books of historically significant valuation and mortgage risk now available

American Enterprise Institute’s International Center on Housing Risk has assembled of a bibliography of historically significant valuation and mortgage risk books and documents from the first half of the 20th century. The oldest book (1903) is Richard Hurd’s Principles of City Land Values.   This book is widely considered to be the first United States’ treatise on city (non-farm) land values.  A few […]

US Mortgage risk increases due to growth in FHA’s market share and loan level risk

Washington, DC, May 12, 2014—American Enterprise Institutes’s National Mortgage Risk Index (NMRI) for home purchase loans hit a new series’ high of 11.89% for April, up from 11.50% in March.  The increase was due to FHA, which had higher market share and increasing loan level risk.  The FHA’s April home purchase volume was 41,756, an increase […]

How “mortgage” became just another word for trouble

Nearly 80 years ago Stewart McDonald, the Federal Housing Administration’s first administrator, observed: “To many people, ‘Mortgage’ became just another word for trouble—an epitaph on the tombstone of their aspirations for home ownership.” Over the last 7 years, the same epitaph has been written for many millions of aspiring homeowners. When established in 1934 by […]

Is today a good time to buy?

Conventional wisdom states the three most important things in real estate are: location, location, location.  This wisdom is especially true today since market fundamentals and local conditions vary greatly across the US.  Thus, not surprisingly, the answer depends on location. Nationally, homes look overpriced, but there can be great variations on a regional or even […]

The Great Housing Boom and Bust: Lessons Relearned

The Great Housing Boom and Bust: Lessons Relearned was a presentation made at last week’s Eastern Secondary Mortgage Conference sponsored by the Florida Mortgage bankers Association. Below are three slides from The Great Housing Boom and Bust: Lessons Relearned.  The take-aways include: Real estate leverage (both nominal and intrinsic) are at historically high levels. The National Mortgage […]

Housing Risk Watch: Homeownership and the State of the Union

The homeownership rate, as reported by the US Census Bureau, stands today at 65.3 percent. When adjusted for the millions of homeowners who are seriously delinquent, the rate drops to 62.7 percent. This is virtually unchanged from the rate of 61.9 percent in 1960, notwithstanding a dramatic loosening of lending standards over the last 50-plus […]