Lenders refinanced 42% more Federal Housing Administration mortgages in July than the month before under a new streamlined program, according to government data.
Roughly 25,750 streamlined refinances closed under the program in July, up from 18,100 in June as lenders worked through a backlog of applicants.
In June, the FHA announced a streamlined refi program to pay reduced rates on upfront and annual insurance premiums. Principal and interest can be cut. Appraisals, income, employment and credit score requirements are waived. The program launched June 11 for borrowers with loans endorsed before June 1, 2009.
Applications tripled in June from May but have since begun to cool.
Roughly 97,000 FHA borrowers applied for a refinance in July, down from 102,000 applications the month before.
The FHA overall endorsed nearly 111,000 mortgages in July, up 21% from one year ago. Roughly two thirds of the new loans were for purchase mortgages and the rest for refinances and reverse home loans. Roughly 78% of all home-purchase FHA mortgages in July went to first-time homebuyers.
Meanwhile, the amount of problem loans still insured by the FHA remained elevated. The government reported 725,645 FHA-backed loans in serious delinquency during July, up 21% from one year ago.
The serious delinquency rate however remained unchanged from June at 9.5%.