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FHA Endorsements Inch Up, Might Rise More

Monthly Federal Housing Administration business inched higher and might accelerate further. Delinquency turned sharply higher, and reverse mortgage production was the slowest it’s been in four years. But commercial mortgage endorsements doubled.

As the first half of this year came to a conclusion, FHA insurance was in force on 8,617,173 residential loans for $1.3300 trillion, according to an analysis of data reported by the Department of Housing and Urban Development.

The residential total was comprised of
$1.1835 trillion in single-family loans, $0.1455 trillion in home-equity conversion mortgages and $0.0010 trillion in Title I loans.

FHA’s book of business grew from 8,613,099 loans for $1.3269 trillion
at the end of the prior month and 8,552,967 loans for $1.2901 trillion on the same date last year.

FHA endorsed 89,949 residential loans for $18.744 billion. The total included $17.801 billion in single-family loans, $0.938 billion in HECMs — the least since August 2014’s $0.850 billion — and $0.005 billion in Title I loans.

Endorsements were 90,294 loans for $18.701 billion in May. The total was 111,874 loans for $22.859 billion in June 2017.

Full first-half endorsements came to 514,578 loans for $108.887 billion, while the total since FHA started fiscal-year 2018 on Oct. 1, 2017, amounted to 796,982 loans for $168.014 billion.

Refinance share on FHA’s single-family business was 17.3 percent in June, thinning form 19.6 percent in the preceding month.

During July, new endorsements likely turned higher based on applications, which climbed to 130,164 in May from 124,041 the previous month. But August business is likely to ease based on June’s applications, which fell to 121,499.

June’s 30-day single-family delinquency rate, including foreclosures and bankruptcies, was 10.62 percent — soaring 64 basis points from one month prior. Delinquency was 57 BPS worse than as of mid-2017.

Reflected in the most recent overall 30-day rate was a 90-day rate of 4.28 percent. The foreclosure rate was 1.09 percent, and the bankruptcy rate was 0.84 percent.

FHA additionally endorsed 178 commercial real estate loans for $2.687 billion — the most since October 2017. The total included $2.182 billion in multifamily loans and $0.505 billion in resident-care mortgages.

CRE business doubled from 83 loans for $1.344 billion in May and tripled versus 56 loans for $0.801 billion in June 2017.

During the six months ended June 30, FHA endorsed 747 CRE loans for $11.714 billion, while its fiscal year-to-date total was 1,104 loans for $17.082 billion.

FHA insurance was in force on 15,219 CRE loans for $127.806 billion as of mid-year 2018. The total consisted of $92.712 billion in multifamily loans, $28.368 billion in resident-care loans and $6.726 billion in hospital loans.

The CRE book of business was 15,141 loans for $126.274 billion as of May 31 and
14,397 loans for $112.404 billion as of June 30, 2017.

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