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FHA Activity Surges

Mortgage News

Loan originators recently stepped up the number of 1003s taken for loans insured by the Federal Housing Administration. The level of government activity is at its highest level in more than five years.

The level of government loan applications jumped 20 percent in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Aug. 29. MBA noted that government applications are “largely FHA.”

The increase was more than three times the increase for conventional applications.

The Government Index currently stands at 417.4 — its highest level since May 30, 2003, MBA spokeswoman Carolyn Kemp said in a statement to MortgageDaily.com.

The latest activity marks the fifth consecutive week of increases for FHA applications.

MBA said last month that government-insured applications accounted for 29 percent of total mortgage applications taken during July — more than triple the share in July 2007. Government share has been rising since February 2007 and accelerated early this year.

The trade group suggested that recently passed legislation has fueled FHA activity.

The highest government share on record is 44 percent in February 1990, MBA said.

In an economic outlook last month, Freddie Mac projected government originations will rise from $0.120 trillion last year to $0.280 trillion this year and $0.285 trillion in 2009.

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