FHA Insures $37bn of Mortgages in July
[Update 1: Includes statements by FHA commissioner David Stevens] The Federal Housing Administration (FHA) insured 197,613 mortgages worth $37bn in July, including $18.4bn for purchase mortgages and $15.6bn for refinance transactions. The FHA, which insures lenders against loss in the event of borrower default, reported more than 108,000 mortgages were endorsed, or insured, in the second half of July, an increase of 11.4% from the first half of the month. More than 55% — almost 60,000 mortgages —were for purchases, and almost 79% of those were with first-time homebuyers, FHA reported. About 40% (43,000 mortgages) of the insured mortgages were refinance cases and the remaining 5% (5,074) were Home Equity Conversion Mortgages (HECMs), or reverse mortgage. For all insured mortgages during the two-week period, the average FICO score was 670. The average purchase FICO was 695; the average refinance FICO was 662. The FHA received 237,450 applications from potential mortgagors in July. The estimated seasonally adjusted annual rate for applications was 2,643,200. In light of the growing volume of interest in the FHA program, a bill signed on August 7 expanded the program's endorsement authority to $400bn for fiscal year 2009 to meet projected demand. "Given our expectation that FHA loan volumes will continue to be high until the credit crisis passes, we just received authorization by Congress for the authority to endorse up to $400bn for FHA insurance and are asking the same for next year," said FHA commissioner David Stevens n a mid-August speech. "We expect that increased authority will allow HUD to endorse approximately 2.25m mortgages in the next fiscal year." Write to Austin Kilgore.