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FHA Originations & Delinquency Deteriorate, But New Apps Soar

FHA News

While originations insured by the Federal Housing Administration were slower in June, an explosion of new refinance applications should help reverse the negative momentum in government home lending. Serious delinquency, meanwhile, was around 10 basis points higher.

During June, FHA endorsed 107,533 mortgages. The dollar volume of June’s production worked out to $19.8 billion in loans.

Activity slowed from May, when 114,008 mortgages were endorsed for $21.3 billion.

New FHA applications climbed to 188,810 from 124,125 in May, pointing to increased endorsements in the upcoming report for July’s activity.

The average loan took 6.2 weeks to process from application to close. The application-to-closing turnaround was faster than the 6.4 weeks in May but a little longer than the 6.1 weeks in June 2011.

In the same month last year, FHA mortgage production was 101,469 loans for $17.7 billion.

First-half 2012 FHA endorsements totaled 159,206 loans for $115.0 billion.

Since FHA’s fiscal year began in October of last year, 893,742 mortgages were endorsed for $162.9 billion. By the end of fiscal-year 2012, endorsements are projected to reach 1.4 million loans for $248.6 billion.

Refinance originations insured by the government fell to $6.7 billion from $8.9 billion in May. But new FHA refinance applications moved up nearly 200 percent in June.

FHA endorsed $11.8 billion in purchase-money mortgages, improving from $11.3 billion in the prior month. However, applications for FHA purchase financing slipped 4 percent.

Home-equity conversion mortgage endorsements amounted to 5,187 reverse mortgages for a maximum claim amount of $1.3 billion, increasing from 4,439 HECMs originated for $1.1 billion a month earlier. New HECM applications were mostly unchanged from May.

Section 203(k) loan endorsements climbed to 1,885 in June from 1,725 the month prior, and endorsements for manufactured housing rose to 1,798 from 1,630.

Condominium endorsements, however, fell to 3,687 from 4,002.

As of June 30, there were 7,635,893 mortgages insured by FHA for $1.0716 trillion. At the end of May, mortgage insurance was in force on 7,633,037 loans for $1.0706 trillion. At the same point last year, 7,151,199 loans were insured by FHA for $0.9946 trillion.

With 721,105 FHA-insured mortgages at least 90 days past due, the delinquency rate was 9.5 percent, worse than 9.4 percent a month earlier and 8.2 percent a year earlier.

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