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FHA Purchase Activity Tumbles, Delinquency Improves

FHA News

Government-insured mortgages originated to finance home purchases sank last month, bringing down overall volume. But reverse mortgage volume managed a gain. For the first time in a year and a half, the number of government-insured mortgages outstanding was lower, while delinquency improved for the first time in nearly a year.

The Federal Housing Administration endorsed 90,561 mortgages for $16.5 billion in February.

Business tumbled from 102,011 loans for $18.3 billion during January. A year prior, 88,269 mortgages were endorsed for $16.8 billion.

During the first two months of this year, FHA originations amounted to 192,572 mortgages for $34.8 billion.

Since the government’s fiscal year started on Oct. 1, 2011, endorsements totaled 462,556 loans for $82.7 billion. By the end of fiscal-year 2012, projected FHA volume is expected to reach 1.4 million loans for $248.6 billion.

FHA endorsed 18 percent less in purchase mortgages last month than in January, while refinance dollar volume was unchanged.

But the maximum claim amount for home-equity conversion mortgage endorsements increased 8 percent.

Section 203(k) endorsements slipped to 1,803 from January’s 1,854, while condominium volume fell to 3,280 last month from 3,604 and manufactured housing originations dropped to 1,678 units from 1,845.

New loan applications, however, were stronger, climbing to 155,248 from 126,835 in January.

It took an average of 6.0 weeks to process an FHA loan last month, faster than the 6.6 weeks it took during January and much better than the 7.6-week turnaround in February 2011.

As of Feb. 29, mortgage insurance was in force on 7,494,104 loans for $1.047.9 trillion, declining from 7,512,171 loans for $1.051.0 trillion as of January.

It was the first time that the number of loans has declined since September 2010, when the total fell to 6,624,780 from 6,722,044 in August 2010.

Delinquency of at least 90 days also fell, to 9.7 percent from 9.8 percent in January. The last time FHA delinquency was lower was in April 2011, when it fell 10 basis points from a month earlier to 8.2 percent.

Delinquency was 8.9 percent in February 2011.

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