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Lending

FHA single-family purchases, refinances escalate

Applications for loans insured by the Federal Housing Administration swelled 16% month-over-month due to increases in both home purchase and refinance filings, according to the agency’s latest outlook.

Lenders submitted 147,509 mortgage insurance applications, up from 127,057 in December, and an increase from 126,835 from last year, respectively.

Furthermore, streamline actions accounted for 58,753 of all refi applications in January, broken out into 62,757 FHA-to-FHA actions and 17,166 conventional conversions. 

In January, there were also 413 applications under the insurance for borrowers in the negative equity program, which requires lenders to first write-down the loan principal on a conventional conversion.

The FHA insured 134,461 single-family mortgages in January, up 113,856 from the previous month and also up 102,011 from a year earlier. 

Meanwhile, the loans insured in January created $24.9 billion in volume, up from $20.9 billion in December and $18.3 billion last year, respectively. The average January mortgage was $185,353. 

At the end of January, FHA had insurance-in-force on 7.78 million mortgages with $1.1 trillion in outstanding balances, the outlook noted.

Borrower credit quality remained relatively high, with average FICO scores of 695 for home-purchases and 701 for refinancings.

The average processing time for a case was 12.1 weeks. Additionally, there were 107,866 insured cases handled through Lender Insurance, accounting for 80.2% in January, the report noted.

There were 738,109 serious delinquent loans, resulting in a default rate of 9.5% for the month.

The FHA paid 55,613 regular insurance claims for 37,310 property conveyances, 11,149 pre-foreclosure sales, and 7,154 other claims so far this year. In addition, 64,373 special claims were paid, including 58,393 loss mitigation actions and 5,980 HECM mortgage assignments, according to FHA.

The report identifies ‘other’ claims paid as coming from the Department of Housing and Urban Development’s Distressed Asset Sale Program and its pilot program to encourage more third-party sales at foreclosure auctions. 

The total number of claims paid year-to-date is 119,986, an increase from 81,067 last year, the report concluded. 

On a similar note, the FHA increased its mortgage insurance premiums for the third time in two years. 

Genworth Financial (GNW) estimates the change will raise required mortgage premiums by $130 a month. Additionally, the FHA will no longer cancel MIPs on 30-year loans with loan-to-value ratios above 90%. 

cmlynski@housingwire.com

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