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FHA Activity Deteriorates

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The monthly volume of Federal Housing Administration originations tumbled, while serious delinquency was up more than 200 basis points from a year ago. Reverse mortgage endorsements, meantime, fell and are headed lower.

January endorsements were 158,612 loans for $29.1 billion, FHA reported today. Activity dropped from 179,155 loans for $32.5 billion the prior month but was better than 143,961 loans for $26.6 billion the prior year.

Since beginning its fiscal 2010 in October, FHA has endorsed 671,148 loans — an increase from 580,891 endorsed during the same time the prior fiscal year. By the time the current fiscal year finishes, FHA projects 1.875 million endorsements.

January’s weighted-average FICO score was unchanged from December 2009 at 694.

Home purchase transactions accounted for 57 percent of last month’s activity, while refinance share was 38 percent.

Section 203(k) activity was 7 percent higher than December, while condominium activity declined 12 percent.

Home-equity conversion mortgage volume accounted for 5 percent of January’s activity. HECM endorsements fell to 7,628 for a maximum claim amount of $2.1 billion from December’s 8,284 loans for a maximum claim amount of $2.3 billion and January 2009’s 9,858 with a maximum claim amount of $2.5 billion. Fiscal year-to-date volume was 32,421 compared to 37,511 during the same time in fiscal 2009.

New applications of all types fell to 126,043 from 141,766 in December, indicating upcoming endorsements will also fall. The 11 percent decline in overall applications was led by a nearly one-third decline in refinances of existing FHA loans and a 16 percent slide in reverse mortgage activity.

Despite two months of declines in endorsements, the average processing time from closing to endorsement grew to 5.3 weeks from 4.4 weeks in December. A year ago, the average time was just 4.0 weeks.

As of Jan. 31, mortgage insurance was in force on 5,917,805 loans for $768.7 billion, higher than 5,815,006 loans for $750.3 billion the prior month. A year earlier, the total stood at 4,756,624 for $547.5 billion.

FHA loan delinquency of at least 90 days climbed to 9.4 percent from December’s 9.1 percent. Late payments have soared from January 2009, when the delinquency rate stood at 7.3 percent.

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