Home/Mortgages/FHA Refinance Applications Remain Elevated

September 4, 2012 (Shirley Allen)

Refinance applications for mortgage loans insured by the Federal Housing Administration (FHA) remained at elevated levels despite falling slightly from June to July but were still over 200 percent higher than last year according to the agency’s Single-Family Outlook report for July.

A total of 181,951 FHA loan applications were submitted in July, 3.6 percent lower than the 188,810 applications submitted the previous month but still 57.9 percent higher than the 115,263 applications submitted in July of last year.

Loan applications for refinancing a current mortgage fell 5.4 percent from June with a total of 97,065 applications submitted in July compared to 102,640 in June. Refinance applications were 212.3 percent higher than in July of last year when 31,081 applications were submitted.

The total number of applications submitted for the purpose of purchasing a home fell again in July, declining by 2.1 percent compared to June and follows a 4.3 percent decline in April. A total of 77,512 applications were submitted in July to purchase homes, down from 79,138 applications submitted in June. Purchase applications were 1.3 percent higher than in July of last year when 76,543 applications were submitted.

Completed applications increased by 3.2 percent from June to July, climbing from 107,533 to 110,924. July’s loan completions were 21.2 percent higher than the 91,533 loans completed a year ago.

Loans for purchased homes accounted for 62.9 percent of all completed FHA insured loans in July with 69,774 completed, an increase of 1.6 percent from June, and 2.1 percent higher than the 68,336 purchase money mortgages in July of 2011.

Refinanced loans accounted for 33.6 percent of all completed loans in July, which was 110.8 percent higher than last year. The 37,282 loans completed in July were 10.7 percent higher than in June.

The average FICO score for a homebuyer securing an FHA loan in July was 696, one point higher than in June but down from 699 a year ago. For refinanced loans, the average FICO score in July was 703, down four points from the previous month and up from 696 a year earlier.

The number of seriously delinquent loans insured by the FHA increased by 0.6 percent from June to July and was 21.2 percent higher than a year ago.

The number of loans that were 90 days or more past due increased by 4,540 in July, bringing the total number of seriously delinquent loans in the FHA’s portfolio to 725,645. In the last year, the number of seriously delinquent loans has increased by 136,283.

The serious delinquency rate was 9.5 percent in July, unchanged from June and up from 8.3 percent in July 2011.

At the end of July, the FHA had 7,663,329 insured single-family mortgages in its portfolio with an amortized balance of $1.076 trillion.

The number of loans insured by the FHA has increased by 6.4 percent in the last year while the amortized balance has increased by 7.2 percent.

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