Home/Mortgages/FHA Loan Originations Down 22% From Last Year

July 28, 2011 (Shirley Allen)

Mortgage loan applications to the Federal Housing Administration (FHA) were 22 percent lower in June than they were a year ago due to a nearly 50 percent drop in refinance applications according to the agency’s Single-Family Outlook report.

The FHA had a total of 131,796 loan applications in June of this year compared to 168,915 in June of 2010, a decrease of 22 percent. June’s loan applications still out paced May’s, which recorded a total of 118,784 applications.

The drop in loan applications is directly attributed to a 50 percent drop in year-over-year refinance applications. In June of last year, the FHA recorded 69,876 refinance loan applications, while in June of this year, there were only 35,367 refinance applications, a decrease of 34,509 applications.

Year-over-year, purchase loan applications were down 2.5 percent, with June 2011 registering 87,674 purchase applications compared to 89,951 purchase loan applications in June 2010.

The number of completed FHA insured loans also dropped in June, nearly 33 percent compared to last year. In June 2010, the FHA insured 150,911 loans, while in June of this year, the FHA insured 101,469 mortgages.

Completed purchase money mortgages were down nearly 36 percent from 115,831 in June 2010 to 74,370 in June 2011. Similarly, refinance transactions dropped nearly 29 percent from 29,776 in June of last year to 21,242 in June 2011.

The average FICO score for a homebuyer securing a FHA loan in June was 699. The average FICO score a year ago was 698. For refinanced transactions, the average FICO score in June was 698, while the average score a year earlier was 694.

At the end of June, the FHA had 7,151,199 insured single-family mortgages in its portfolio with an amortized balance of $994.6 billion.

The serious delinquency rate, homes that were 90 days or more past due, was 8.2 percent, down from 8.6 percent in June 2010.

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