The number of active mortgage companies fell 25 percent from 2006 to 2008, in part because the warehouse lines of credit that mortgage companies depended on to fund their loans contracted significantly. In addition, overall demand for housing slowed appreciably. Indeed, the number of mortgage applications in 2008, 14.2 million, was about half the 2006 level and the lowest in more than a decade.
Such a low level of applications suggests that potential borrowers were wary of entering the housing market or feared being turned down for a loan. The 2008 HMDA data also show a dramatic increase in loans made by FHA and VA, whose share of total mortgage originations were higher than at any time in the 19-year history of HMDA reporting.