Home/Mortgages/FHA Mortgage Applications Decline Ten Percent in September

October 24, 2011 (Shirley Allen)

Monthly mortgage loan applications to the Federal Housing Administration (FHA) declined 9.6 percent last month while refinance activity continues to be sharply less than a year ago according to the agency’s Single-Family Outlook report for September.

The FHA had a total of 129,045 loan applications in September, down from 142,793 applications in August. Applications were also down from September of last year when 255,938 applications were submitted, a decline of 49.6 percent.

Refinance loan applications declined by 2.8 percent from August to September with a total of 48,368 applications submitted in September compared to 49,773 submitted in August.

Refinance applications was significantly lower compared to last year despite the record low interest rates in September. Applications were 66.9 percent lower than September 2010 which posted 146,014 submitted applications.

Purchase loan applications were also lower in September declining by 13.9 percent compared to August. A total of 73,283 purchase applications were submitted in September, down from 85,080 applications submitted in August. Purchase applications were 24.0 percent lower than the 96,446 applications that were submitted in September 2010.

The number of completed FHA insured loans decreased 8.5 percent to 91,963 in September compared to 100,490 in August, and was 27.2 percent lower lower than the 126,326 completed applications in September 2010.

Purchase money mortgages accounted for 72.4 percent of all completed FHA insured loans in September with 66,602 completed, a decline of 12.1 percent from August, and 6.4 percent lower than the 71,145 purchase money mortgages in September 2010.

Completed FHA insured refinance loans only accounted for 21.5 percent of all completed loans, which was 59.8 percent lower than last year. The 19,771 completed loans in September was still 4.7 percent higher than in August.

The average FICO score for a homebuyer securing an FHA loan in September was 697, unchanged from August but down from 700 a year ago. For refinanced transactions, the average FICO score in September was 698, while the average score a year earlier was virtually unchanged at 699.

At the end of September, the FHA had 7,304,368 insured single-family mortgages in its portfolio with an amortized balance of $1,019.7 billion.

The number of loans insured by the FHA has increased by 10.3 percent in the last year while the amortized balance has increased by 13.6 percent.

The serious delinquency rate, homes that were 90 days or more past due, was 8.7 percent in September, up from 8.4 percent in August and also up from 8.4 percent in September 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