FHA single-family originations have tailed off during the first two months of 2010 as loan production fell to $22.3 billion in February-off 25% since December.

Lenders originated $30.1 billion in FHA-insured loans in December and $26 billion in January. February's loan production could be off because of severe winter weather.

FHA's monthly activity report shows that the serious delinquency rate fell to 9.17% in February, down from 9.4% in the previous month. However, the "FHA Outlook" shows the federal mortgage insurance program is seeing heavy demand for streamline refinancings, which could be problematic.

Streamlines involve refinancings of existing FHA borrowers so they can lower their mortgage payments. They used to be considered low-risk transactions. But FHA completed 329,400 streamline refinancings in the fiscal year that ended September 30, 2009 and 5.5% are already 90-days or more past due, according to FHA.

As of February 28, FHA has endorsed another 134,800 streamline refinancings. FHA is projecting it could do 311,500 streamlines by September 30 when FY 2010 ends.

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