Data Confirms Fed/Treasury Took Over Mortgage Market

UPI reports that Fannie Mae, Freddie Mac and the FHA became the primary providers of mortgage credit in 2008. Fannie Mae and Freddie Mac increased their share of securitized mortgages to 42% in 2008 compared to 28% in 2006.

"Just released mortgage data for 2008 confirm that the federal government effectively took over the housing credit markets last year.The Home Mortgage Disclosure Act, HMDA, which requires banks to report detailed mortgage lending data every quarter, corroborates the increasing role that FHA, Fannie Mae and Freddie Mac played in the U.S. mortgage markets last year. The data also reflects how severe the credit crunch was on the mortgage business.Due to dire market conditions, the government was forced to get more involved in mortgage lending last year. Loan limits at Fannie Mae, Freddie Mac and the FHA were increased markedly, which increased the government agencies' market share. The mortgage credit market was on the verge of collapse last year with private mortgage insurance drying up and the private mortgage-backed securities market near ruin. As a result, Fannie Mae, Freddie Mac and the FHA became the primary providers of mortgage credit.Fannie Mae and Freddie Mac together, increased their share of securitized mortgages to 42 percent in 2008 compared to a 28 percent share in 2006. Conversely, private securitization fell to 0.6 percent from a 10 percent share in 2006".

Read the full report from Real Estate Economy Watch here.