Agenda - 04-15-2008-3d - Laserfiche WebLink

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. Orange County, North Carolina - AIFCH - 2007 often cannot match, the increase in sub-prime lending, and competitive offers from the conventional mortgage market. In 1999, one fifth of all home purchases in the United States were FHA loans. Of this, two-fifths were for Blacks and Hispanics. In 2004, when the most complete date is available, FHA/VA accounted for only 6.7% of all applications in the County. Conventional home purchase applications accounted for 29% of all applications. Nineteen-point-four percent of Orange County residents applied for FHA loans. (Table 6.7) Overall, the percent of local Blacks, Hispanics and other minorities using FHA was well below the national average of 62.4%. As indicated in Table 6.7, the percent of low-to moderate-income applicants also was well below the national average at more than 27%. However, in tracts with a minority population of 20% or higher, applications were double the national average. This could mean that applicants in these tracts are taking advantage of better opportunities for home ownership. But it also raises the question: are all those who submit government-backed applications qualified for such mortgages or-are they being placed in this category when they would qualify for a conventional mortgage? When considering only the 2,704 applications for home purchases, conventional applications accounted for four times as many applications (81.2%) as FHA/VA applications (18.8%). 6.8 Refinancing and Home Improvement Activity Refinancing activity far exceeds home purchases. With direct mail, a-mail, Web and traditional advertising, it is little wonder that refinancing is the most active segment of the mortgage market. Refinancing and home improvement loans should be the easiest to obtain since the lender is dealing with a known borrower who has equity in the home and a commitment to the dwelling. In Orange County, refinancing applications were denied less frequently than originations. Refinancing applications accounted for 65.8% of all mortgage type applications in Orange County. For all remaining Counties in the MSA, refinancing accounted for 54.1 % of all applications. For the MSA as a total, 54.7% were for refinancing. Considering that conventional home purchase applications accounted for only 16.6% of the County applications, 30% for the remaining County's, and 29.1 % of the MSA, this is a significant indicator of the mortgage market in the community. Of the 1,722 refinancing applications accepted in the County, 46% were originated and 26% were denied. These rates are significantly higher than home-purchase rates. Home 17