Last month, delinquency on government-insured mortgages jumped around 30 basis points and was a full percent higher than the same time last year. Meanwhile, reverse mortgage production sank and purchase activity diminished — driving down overall government originations.
During October, the Federal Housing Administration endorsed 88,060 loans for $15.7 billion. Because FHA’s fiscal year started on Oct. 1, fiscal year-to-date volume was the same as October’s total volume.
Activity fell from the previous month, when 91,963 FHA loans were insured for $16.2 billion, according to monthly operational data disclosed by the housing agency.
Originations tumbled from a year earlier, when 125,218 loans were endorsed for $24.4 billion.
From Jan. 1 to Oct. 31, endorsements amounted to 961,715 loans for $174.0 billion.
But last month’s lull in total endorsements appears to be only temporary based on new applications, which inched up to 129,675 from September’s 129,045 applications.
The average processing time from application to closing took longer, expanding to 6.0 weeks from 5.9 weeks a month earlier. But processing time has been cut from 6.9 weeks during October 2010.
Based on closed dollar volume, purchase production fell 9 percent from September to $10.2 billion. In addition, purchase strength appears to be weakening even more, with new applications falling 4 percent. However, the recent reinstatement of jumbo FHA loan limits could place upward pressure on upcoming activity.
Government refinance endorsements rose 22 percent to $4.4 billion, while new refinance applications climbed 7 percent. But recent strength in the stock market has driven Treasury yields higher and could put the kibosh on a continued FHA refinance rally.
Included in total originations last month were 4,653 home-equity conversion mortgages endorsed for a maximum claim amount of $1.1 billion. HECM activity tumbled from 5,590 loans for $1.4 billion in September. During the same month last year, FHA insured 5,279 reverse mortgages for a maximum claim amount of $1.3 billion.
It looks like November will be no better for HECM endorsements, with applications slipping 1 percent between September and October.
FHA endorsed 2,016 Section 203(k) loans in October, down 9 percent from the prior month. Condominium endorsements fell 5 percent to 2,998, and manufactured housing originations were down 3 percent to 1,648 endorsements.
There were 7,342,078 FHA loans outstanding as of Oct. 31 for $1.0255 trillion. Mortgage insurance in force grew from September, when there were 7,304,368 loans outstanding for $1.0197 trillion.
Mortgage insurance in force was up more than $106 billion from the same point in 2010.
Delinquency of at least three months jumped to 9.0 percent as of the end of October from 8.7 percent as of Sept. 30. Ninety-day delinquency was a hundred basis points worse than on Oct. 31, 2010.
