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High-LTV Originations See Sharp Increase Under HARP

Overall, mortgage originations declined in April. However, originations for loans with high loan-to-value ratios have been on the rise the past few months with April as no exception, according to the latest data from ""Lender Processing Services"":http://www.lpsvcs.com/Pages/default.aspx (LPS) released Monday.


LPS suggests the rise in high-LTV originations could be a sign that HARP is having an impact on originations the past few months.

Total loan originations dropped 12 percent in April after rising steadily since the beginning of the year.


April originations are still up year-to-date by 9.3 percent and year-over-year by about 7.4 percent.

The percentage of non-FHA originations has also been on the rise since for several months, and it did not drop off in April. In fact, non-FHA loan originations have risen steadily since November 2011 when they took up 20.2 percent of total loan originations to 33.8 percent in April.

On the other hand, high LTV loans, those with LTVs of more than 80 percent, posted a sharp increase early this year after declining toward the end of last year.

The number of high LTV, non-FHA originations jumped from 85,000 in January to 112,000 in February and then 130,000 in March. The category has leveled off this month at 131,000.

While HARP may be having an impact on the originations sector, the housing market continues to struggle with high levels of foreclosures, especially in judicial states, where foreclosures must be processed by the courts before they are completed.

Foreclosure inventory nationwide stands at 4.14 percent, according to LPS' May data. In judicial states, foreclosures make up 6.5 percent of housing stock, while in non-judicial states, inventory is much lower, 2.46 percent.

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.

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