Demand for Federal Housing Administration single-family loans slowed in July with residential lenders originating just $16 billion of government-backed product.
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However, the funding numbers were just enough to push FHA’s outstanding mortgage insurance portfolio over the $1 trillion mark for the first time in the program’s history.
As of July 31, FHA insured $1.003 trillion of single-family loans — up 11% from a year ago.
The surge in demand for FHA products — following the 2008 meltdown of the subprime market — pushed the agency’s market share up to 30% this year from just 3% in 2006.
But it looks as though FHA has passed its peak in this economic cycle. Acting FHA commissioner Carol Galante told a congressional panel last week that FHA’s market share has fallen to 17%.
According to the monthly “FHA Single-Family Outlook” report, lenders originated $16.1 billion of FHA-insured single-family loans and reverse mortgages, a 9% decline from June.
Overall, FHA originations are down 25% for the first 10 months of fiscal year 2011 (which ends Sept. 30), compared to the same period in FY 2010.
So far, FHA has endorsed $202.5 billion in loans as of July 31, compared to $268.5 billion during the first 10 months in FY 2010.
FHA’s $1 trillion portfolio has a serious default rate of 8.3% with 599,000 loans that are 90 days or more past due. A year ago, the serious default rate was 9.1%.
Daily Briefing | Monday, September 12, 2011
B of A Promises $5B of Costs Savings, May Consider BK for CFC
Bank of America Corp. chief executive Brian Moynihan promised investors he would save $5 billion in costs by 2013, but was otherwise scarce on details during a much-anticipated speech on Monday.
MBA: CMBS Loans Hit New Delinquency Peak
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Wingspan Previews Tech, Launches Insurance Unit
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More Cranes Roosting in South Florida
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A Mortgage Banker’s Memories of September 11
As the United States commemorates the 10th anniversary of the terrorist attack, the financial community, among many others, is taking time to reflect on those lost. We should also remember how difficult it must be for their surviving families.