Home/Mortgages/FHA-Insured Mortgage Applications Unchanged in October

December 2, 2011 (Shirley Allen)

Monthly mortgage loan applications to the Federal Housing Administration (FHA) remained virtually unchanged from September to October but were 26 percent below last year levels as refinance activity has almost fallen in half according to the agency’s Single-Family Outlook report for October.

The FHA had a total of 129,685 loan applications in October, up slightly from 129,045 applications in September. Applications were down from October of last year when 175,421 applications were submitted, a decline of 26.1 percent.

Refinance loan applications increased by 7.0 percent from September to October with a total of 51,772 applications submitted in October compared to 48,368 that were submitted in September.

Refinance applications continued to be significantly lower compared to last year despite the historically low interest rates in October. Applications were 47.5 percent lower than the 98,544 applications submitted in October of 2010.

Purchase loan applications were lower in October, declining by 3.7 percent compared to September. A total of 70,580 purchase applications were submitted in October, down from 73,283 applications that were submitted in September. Purchase applications were 2.8 percent higher than the 68,628 applications that were submitted in October 2010.

The total number of completed FHA insured loans decreased 4.2 percent to 88,060 in October compared to 91,963 in September, and was 29.7 percent lower than the 125,218 completed loans in October 2010.

Purchase money mortgages accounted for 68.8 percent of all completed FHA insured loans in October with 60,596 completed, a decline of 9.0 percent from September, and 7.9 percent lower than the 65,781 purchase money mortgages in October 2010.

Completed FHA insured refinance loans accounted for 25.9 percent of all completed loans, which was 57.9 percent lower than last year. The 22,811 loans completed in October were still 15.4 percent higher than in September.

The average FICO score for a homebuyer securing an FHA loan in October was 696, down from 697 in September and down from 700 a year ago. For refinanced transactions, the average FICO score in October was 703, while the average score a year earlier was virtually unchanged at 702.

At the end of October, the FHA had 7,342,078 insured single-family mortgages in its portfolio with an amortized balance of $1.026 trillion.

The number of loans insured by the FHA has increased by 9.8 percent in the last year while the amortized balance has increased by 12.8 percent.

The serious delinquency rate, homes that were 90 days or more past due, was 9.0 percent in October, up from 8.7 percent in September and also up from 8.0 percent in October 2010.

For the fiscal year 2011, the FHA insured 1,271,211 mortgages for $236 billion. This included 777,521 purchase mortgages, 420,561 refinanced mortgages as well as 73,129 reverse mortgages.

Tags: FHA, Single-family Outlook report, loan originations, purchase loans, refinance loans, FICO score, serious delinquency rate