Mortgage bankers originated $26.4 billion of Federal Housing Administration loans in November, an 8.2% jump from October, it was reported Wednesday, but delinquencies also grew.
The agency approved its first FHA "short refinancing" loan in November. Lenders have submitted another 40 such loans for FHA insurance. It and the Treasury Department designed the program to refinance underwater conventional loans into FHA-insured loans after the investor writes down the principal to 97.75% of the home's current value. Fannie Mae, Freddie Mac and their regulator are reluctant to take this hit on loans that are current, and this is likely to limit the program's volume unless things change.
In November nearly 50% of FHA endorsements involved home purchases. First-time buyers were 73% of FHA borrowers. The share of FHA-insured loans 90 days or more past due jumped to 8.7%, from 8% in October. Nearly 589,000 FHA loans were seriously delinquent at Nov. 30.