While an increase in monthly Federal Housing Administration fundings was fueled by strengthened purchase activity, an expected further rise will be driven by refinances. But government mortgage activity was down a third from a year earlier. FHA delinquency, meanwhile, deteriorated for the second consecutive month.
FHAÂ mortgagees closed 100,490 loans for $17.4 billion during August, according to operational data released by the Department of Housing and Urban Development.
Business was better than July, when 91,533 mortgages were endorsed for $16.1 billion. But production fell well short of 139,045 endorsements for $25.9 billion during August 2010.
The improvement from July was driven by purchase transactions, which rose to 75,798 loans for $12.7 billion in August from 68,336 endorsements for $11.6 billion.
Refinances increased to 18,885 mortgages insured for $3.3 billion from 17,683 loans for $3.2 billion in July.
The volume of home-equity conversion mortgages endorsed grew to 5,807 loans for $1.4 billion from 5,514 loans endorsed for $1.3 billion during July.
Section 203(k) activity climbed to 2,242 endorsements from the prior month’s 1,925, while condominium production edged up to 3,637 from 3,607. Manufactured housing volume was 1,817 loans versus the previous month’s 1,663.
FHA mortgagees took less time to complete loan transactions, with the average processing time from application to closing down to 5.9 weeks from 6.0 weeks in July. Turnaround has fallen from 6.8 weeks during this month last year.
It looks like September’s closed volume will be even stronger based on August’s loans applications, which climbed to 142,793 from just 115,263 in July.
Refinances drove the improvement in new applications, rising 60 percent from a month earlier.
Purchase applications were up 11 percent, while HECMÂ applications edged up 4 percent.
From Oct. 1, 2010, through Aug. 31, 2011, total FHA originations amounted to 1,179,375 loans endorsed for $219.9 billion. By the end of the fiscal year on Sept. 30, HUDÂ expects volume to reach 1.5 million loans endorsed for $288.7 billion.
However, an analysis by Mortgage Daily has full-year FHA volume coming in closer to $240 billion during fiscal 2011.
On a calendar basis, FHA has endorsed 789,692 mortgages for $142.1 billion as of the end of last month.
Mortgage insurance was in force on 7,259,736 loans for $1.0128 trillion as of the end of August.
Delinquency of at least three months on FHA loans worsened to 8.4 percent last month from July’s 8.3 percent. But FHA performance has improved from 8.5 percent as of Aug. 31, 2010.
