Origination of federally insured mortgages was lower in July. An increase in refinance and reverse mortgage production was not enough to offset a drop in purchase endorsements. But a surge in refinance applications is likely to boost overall business this month.
The Federal Housing Administration reported that it endorsed 144,514 loans for $25.9 billion last month. Endorsements fell from 150,911 loans for $26.4 billion in June. Looking at July 2009, FHA endorsed 197,613 loans for $37.0 billion.
Business is likely to pick up in August, with new applications rising to 173,068 last month from 168,915 in June.
Since starting its fiscal year on Oct. 1, 2009, FHA said it has endorsed 1,481,744 loans for $268.5 billion. By the time its fiscal year ends on Sept. 30, endorsements are projected to reach 1.9 million loans for $350 billion.
On a calendar basis, year-to-date volume was 818,475 endorsements. From Jan. 1 to through Sept. 30, FHE endorsed 1.2 million loans for $225.4 billion.
FHA loans for home purchases fell to 108,608 endorsements for $18.7 billion last month from June’s 115,831 units for $19.6 billion. Purchase volume is headed even lower based on applications, which fell to 80,396 from 89,951 in June.
But refinance endorsements rose to 30,005 loans for $5.7 billion from June’s 29,776 loans endorsed for $5.5 billion. Refinances have continued to gain steam, with refinance applications leaping to 83,711 last month from 69,876 a month earlier.
Reverse mortgage production was also stronger, climbing to 5,901 loans for a maximum claim amount of $1.5 billion from the 5,304 loans endorsed for $1.3 billion during June. FHA endorsed 9,830 home-equity conversion mortgages for $2.9 billion in July 2009. Not much change can be expected with this month’s HECM endorsements; HECM applications eased to 8,961 from 9,088 in June.
Condominium volume fell to 7,346 endorsements in July from 7,638 the month before, while Section 203(k) endorsements rose to 2,172 from 1,845.
The average processing time from application to closing improved to 6.9 weeks from 7.1 weeks in the June report. Processing time hasn’t changed much from 6.8 weeks in June 2009.
There were 6,499,005 FHA loans outstanding with principle balances aggregating $873.5 billion as of July 31. The total was higher than 6,402,527 loans for $865.5 billion a month earlier and 5,263,811 loans for $647.3 billion a year earlier.
FHA delinquency of at least 90 days was unchanged from June at 8.3 percent. Delinquency, however, was lower a year ago at 7.8 percent.