For four months in a row, delinquency has decreased on loans insured by the Federal Housing Administration. Despite an increase in purchase activity, refinances dragged down overall endorsement volume — which appears headed even lower. Reverse mortgage endorsements tumbled, but new reverse applications were higher.
FHA endorsements eased to 124,754 loans for $22.3 billion during May from 126,316 loans for $22.9 billion in April, the housing finance agency reported. A year ago, 162,690 loans for $30.8 billion were endorsed.
Last month’s activity included 89,291 purchase mortgages for $15.3 billion, higher than 84,723 for $14.7 billion the prior month. Refinances fell, however, to 30,909 loans for $5.8 billion from the previous month’s 36,082 loans for $6.8 billion.
The volume of home-equity conversion mortgages sank to 4,554 loans for $1.2 billion from 5,511 HECMs for $1.4 billion in April.
Section 203(k) activity was 1,574 endorsements, lower than April’s 1,856. Condominium volume fell to 5,942 from 6,330, and manufactured housing loans declined to 2,001 from 2,105.
The weighted-average FICOÂ score on May endorsements was 698, inching up from 697 a month earlier and higher than 678 a year earlier.
FHA said it received 181,524 applications during May — tumbling from 215,578 the prior month. Purchase applications dropped 20 percent, while refinances were down 8 percent.
But reverse mortgage applications increased 2 percent.
The average processing time from application to closing was unchanged from April at 6.6 weeks.
From FHA’s fiscal year started on Oct. 1, 2009, through May 31, there were 1,186,409 loans endorsed for $216.3 billion. By the end of fiscal 2010, the agency expects volume to rise to 1,875,000 mortgages for $349.7 billion.
FHA reported that 6,296,586 FHA loans were outstanding for $837.8 billion, higher than 6,192,885 loans for $820.0 billion in April.
Delinquency of at least 90 days improved to 8.4 percent from April’s 8.5 percent. It was the fourth consecutive month that FHAÂ delinquency has declined. The late payment rate was 7.4 percent in May 2009.
