Home/Mortgages/FHA Mortgage Applications Fall Again in May, Refi App’s Down 44 Percent

July 10, 2012 (Shirley Allen)

Applications for mortgage loans insured by the Federal Housing Administration (FHA) fell by double digits again in May as applications to refinance a current mortgage fell by over forty-four percent during the month according to the agency’s Single-Family Outlook report for May.

A total of 124,125 FHA loan applications were submitted in May, 20.7 percent lower than the 156,453 applications submitted in the previous month but 4.5 percent higher than the 118,784 applications submitted in May of last year.

Loan applications for refinancing a current mortgage fell 44.3 percent from April with a total of 34,407 applications submitted in May compared to 61,824 in April. Refinance applications were still 9.6 percent higher than in May of last year when 31,380 applications were submitted.

The total number of applications submitted for the purpose of purchasing a home was also lower in May, declining by 6.1 percent compared to April. A total of 82,726 applications were submitted in May to purchase homes, down from 88,121 applications submitted in April. Purchase applications were 3.5 percent higher than in May of last year when 79,931 applications were submitted.

Completed applications grew by 4.6 percent from April to May, increasing from 108,954 to 114,008. May’s loan completions were also 18.9 percent higher than the 95,907 loans completed a year ago.

Loans for purchased homes accounted for 58.1 percent of all completed FHA insured loans in May with 66,220 completed, an increase of 12.8 percent from April, but 0.4 percent lower than the 66,475 purchase money mortgages in May of 2011.

Refinanced loans accounted for 38.0 percent of all completed loans in May, which was 78.8 percent higher than last year. The 43,349 loans completed in May were 5.0 percent lower than in April.

The average FICO score for a homebuyer securing an FHA loan in May was 699, four higher than in April and down from 700 a year ago. For refinanced loans, the average FICO score in May was 711, down one from the previous month and up from 701 a year earlier.

The number of seriously delinquent loans insured by the FHA increased by 0.8 percent from April to May and was 23.2 percent higher than a year ago.

Loans that were 90 days or more past due increased by 5,774 in May bringing the total number of seriously delinquent loans in the FHA’s portfolio to 713,104. In the last year, the number of seriously delinquent loans has increased by 134,171.

The serious delinquency rate was 9.4 percent in May, unchanged from April but up from 8.2 percent in May 2011.

At the end of May, the FHA had 7,633,037 insured single-family mortgages in its portfolio with an amortized balance of $1.071 trillion.

The number of loans insured by the FHA has increased by 7.7 percent in the last year while the amortized balance has increased by 8.7 percent.

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