Purchase Mortgages Make Up 50% of FHA Endorsements

FHA lenders endorsed 97,700 single-family loans in August, down just 4% from the prior month, according to the latest Federal Housing Administration loan production report.

The new report, which was delayed because of the government shutdown, shows that purchase mortgages accounted for 65% of transactionsthe highest rate this year.

Purchase loan endorsements totaled 63,800 in August, down from 66,550 in the prior month. Nearly 80% of the purchase loans went to first-time homebuyers.

Back in May during the refinancing boom, purchase mortgage transactions accounted for 50% of loan endorsements but loan production was much higher. FHA lenders endorsed 123,800 single-family loans in May.

FHA also reported that prepayments of FHA loans in August totaled 86,400 and 25,800 of those borrowers refinanced back into a FHA-insured loan.

That is a slight improvement over July, when prepayments hit 102,400 and just 30,350 of the borrowers refinanced into a FHA loan.

Heavy prepayments are a concern because it robs FHA of needed insurance premiums.

FHA commissioner Carol Galante testified before a House panel Tuesday and indicated the insurance fund is showing signs of improvement.

The serious delinquency rate on FHAs insured portfolio fell below 8% in August from 9.5% a year ago.

The commissioner also noted that FHA presently has $48 billion in liquid assets to cover losses and claims, compared to $31 billion back in February.

Article source: http://www.nationalmortgagenews.com/dailybriefing/Purchase-Mortgages-FHA-Endorsements-1039656-1.html

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