The MBA released the results of its most recent Subprime Mortgage Originations Survey just before the July 4th holiday, which found that the percentage of subprime loans being used by first-time home buyers increased from 12 percent to 15 percent in the second half of 2006. Of course, this doesn't capture trending in the first half of this year, which I would expect to show a precipitous drop in the same measure. Highlights of some key findings:
  • Based on loan count, 32 percent of subprime purchase loans were made to a first-time home buyer, up from 25 percent in the first half of 2006.
  • Almost three-fourths, or 72 percent, of subprime originations came through the broker channel in the second half of 2006, an increase of 3 percent from the first half of 2006.
  • Adjustable Rate Mortgage (ARM) loans (including Interest Only ARM Loans) comprised 75 percent of subprime originations in the second half of 2006, versus an ARM share of 67 percent of subprime originations in the first half of 2006 (see Chart 2).
A note to HW readers: I'll be headed to New York later today, so blogging may be light the next few days.