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FHA Endorsements Down, Delinquency Up

New monthly business at the Federal Housing Administration turned lower and is likely to recede even further.
Reverse mortgage applications exploded ahead of premium changes. FHA delinquency deteriorated.

At the end of its fiscal-year 2017, insurance was in force on 8,578,803 residential loans for $1.3031 trillion, according to an analysis of data reported by the Department of Housing and Urban Development.

FHA’s book of business was comprised of $1.1588 trillion in single-family loans, $0.1433 trillion in home-equity conversion mortgages and $0.0010 trillion in Title I loans.

The overall total grew from 8,571,759 loans for $1.2995 trillion as of Aug. 31 and 8,461,151 loans for $1.2518 trillion as of Sept. 30, 2016.

FHA
endorsed 97,871 residential loans for $20.394 billion during September 2017 — including $18.887 billion in single-family mortgages, $1.501 billion in HECMs and $0.006 billion in Title I loans.

Business declined from 117,035 loans for $24.289 billion a month earlier
and 120,943 units for $24.677 billion a year earlier.

From Jan. 1, 2017, through Sept. 30, FHA endorsed 954,259 loans for $195.936 billion. For all of fiscal-year 2017, endorsements amounted to 1,305,002 loans for $267.871 billion, slightly more than the 1,310,521 loans endorsed for $260.134 billion the preceding year.

Single-family refinance share during September was 24.2
percent, widening from 22.4 percent a month earlier.

October’s business likely declined further based on new applications, which fell to 130,811 in the latest report from 145,124 in August.

HECM applications accounted for 20,405 of September 2017’s total, more than doubling volume of 8,907 the prior month. The surge came ahead of an increase in the initial FHA mortgage insurance premium on HECMs to 2.00 percent in October from just 0.50 percent.

Delinquency on FHA’s single-family loans shot up to 11.79 percent as of Sept. 30, 2017, from 10.40 percent the prior month and 10.97 percent a year prior. Included in the most-recent figure was a 1.19 percent foreclosure rate and an 0.77 percent bankruptcy rate.

Ninety-day delinquency rose to 4.32 percent from 4.24 percent as of Aug. 31.

In FHA’s commercial real estate business,
which it reports a month sooner than residential metrics, endorsements climbed to 177 loans for $3.158 billion in October from 171 loans for $2.755 billion the previous month and 104 loans for $1.527 billion the same month last year.

The latest CRE volume consisted of $2.412 billion in multifamily loans and $0.746 billion in resident-care loans.

During the 10 months ended Oct. 31, 2017,
1,109 CRE loans were endorsed for $16.256 billion.

FHA insurance was in force on 14,807 CRE loans for $119.525 billion as of the latest date, increasing from 14,644 loans for $116.638 billion at the end of September and 14,276 loans for $109.675 billion at the same point last year.

The Oct. 31, 2017, CRE book of business was made up of $85.658 billion in multifamily loans, $26.777 billion in resident-care loans and $7.089 billion in hospital loans.

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