Indian Mortgages Down for 2015 Per Fannie Mae

Mark Fogarty

Federal mortgage agency Fannie Mae bought fewer mortgages to American Indians and Alaska Natives during 2015, according to a report it made to Congress and its regulator, the Federal Housing Finance Board.

Fannie Mae purchased 10,734 mortgages made to Indians last year with an unpaid principal balance of $2.45 billion, the agency reported. That was 0.55 percent of its total volume, below Indian representation in the national population.

In 2014 it bought 11,666 mortgages to Indians with an unpaid principal balance of $2.5 billion, 0.69 percent of its total.

Both years represent a rebound from 2013, when Fannie purchased just 0.32 percent of its volume in mortgages made to Indians. Total loans bought were 10,129 with balances of $1.8 billion.

Fannie Mae, along with cousin agencies Freddie Mac and Ginnie Mae, is not a lender, but a provider of liquidity to the mortgage market. It creates a so-called “secondary market” by buying the loans made by the banks, savings banks or mortgage banks that originally made the loan to a consumer. The net effect is the lender is immediately repaid for the outlay it had loaned to the borrower, and it can use the Fannie Mae money to make another mortgage.

Fannie also bought 5,793 mortgages to Native Hawaiians and other Pacific Islanders (these include Natives of Guam and American Samoa) in 2015. That made for a total of $1.5 billion in home finance, for a percentage of 0.30 percent of its volume.

In 2014, the percentage of loans to Native Hawaiians was just about the same, at 0.31 percent. That was through 5,222 mortgages with $1.3 billion in unpaid principal balance.

Total volume for Native mortgages bought by Fannie Mae in 2015 (adding the Indian and Native Hawaiian totals together) was $3.95 billion through 16,527 mortgages. That translates to an average mortgage of $239,000.

The split between homes purchased and homes refinanced in 2015 for Indians was won by refis. There were 6,590 homes refinanced and 4,144 homes purchased last year. Native Hawaiians had 3,645 home loans refinanced and 2,148 purchased in 2015.

Fannie Mae’s Native share improved when looked at through the lens of low-income mortgages. It achieved a share of 0.82 percent for low-income refinances and 0.61 percent for low-income purchase mortgages.

In 2014, Fannie Mae made it easier for lenders to sell them federal Department of Housing and Urban Development section 184 American Indian mortgages. It made these loans eligible for purchase under its regular program, rather than on a negotiated basis. It also indicated it would make these loans eligible for its mortgage backed security (MBS) program.

Fannie Mae’s cousin Ginnie Mae has purchased HUD 184s for its MBS program for many years.

Fannie Mae does business with more than 125 tribal nations around the country, from the largest (the Navajo Nation) down to small tribes like the Bay Mills Indian Community in Michigan.

Fannie Mae negotiated and signed an important memorandum of understanding with the Navajo Nation in the 1990s to bring the secondary mortgage market to Indian tribes.

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