Slowly but surely, the Federal Housing Administration (FHA) is lowering their delinquency numbers. June marked the fifth straight month that FHA delinquencies have declined. However, there is reason for little confidence in the overwhelming numbers of late payers and looming foreclosures.
The FHA reports that in fiscal year 2010 the agency has paid 207,715 claims. 124,191 of these claims were loss mitigation claims while 83,524 represented property conveyances.
As of June 30th, 532,757 mortgages guaranteed by the FHA were 90 days late constituting an 8.3 percent seriously delinquent rate. The May seriously delinquent rate was 8.4 percent. In January, the rate was 9.4 percent recorded in January 2010.
The FHA reports an upturn in new business. New FHA mortgages amounted to 150,911 accounting for $26.4 billion in new business. The May total for new policies amounted to 124,754 and $22.4 billion.
A breakdown of the June mortgages shows that 115,831 transactions were purchase money mortgages while 29,776 transactions were refinanced mortgages and 5.304 were reverse mortgages. Of the 29,776 refinance transactions, 9,682 were former FHA mortgages while 20,095 were previously conventional mortgages.
168,915 new insurance applications were processed by the FHA in June compared to 181,524 in May. The FHA projects a seasonal downturn for the next few months. Overall, the agency had 6,402,527 mortgages amounting to $865.5 billion in force on June 30th.
The FHA and Veteran’s Administration have the most flexible owner occupied first mortgage policies in existence right now. The strength of these lenders lies in their low down payments and flexible terms.
Since 2009, there has been concern that the FHA would get caught up in the lax credit practices from Fannie Mae and Freddie Mac, whose lending policies have severely damaged the housing market. With the end of low doc loans and the new increased down payment requirements, the goal is that every loan be a successful, affordable loan.