Federal Housing Administration endorsements of single-family loans fell 24% in the first quarter compared with the fourth quarter, as the slowdown in lending is even affecting low-down-payment products.
The FHA endorsed $58.2 billion in one-to-four family loans in the first quarter, down from $76.9 billion in the prior quarter (based on the calendar year not the fiscal year).
The monthly FHA Single-Family Outlook report released Thursday showed lenders originated $18.3 billion in FHA-insured loans in March, up 8% from February.
Purchase mortgages made up $10.1 billion of loan production along with $1.8 billion in FHA-insured reverse mortgages known as home equity conversion mortgages. HECM endorsements by the FHA were stuck at $1.8 billion each month of the first quarter. However, the new HECM Saver product has been gaining traction.
Reverse mortgage lenders originated 409 HECM Savers in March, up from 165 in January. Since the product was launched last October, the FHA has endorsed 964 HECM Savers. The HECM Saver is attractive to seniors because it has a nominal 0.01% up-front fee, compared with the 2% up-front fee on the standard HECM product.
Meanwhile, very few lenders are using the FHA's refinancing products to help underwater borrowers.
Over the six-month period that ended March 31, lenders have made 159 Hope for Homeowners loans and 107 FHA Short Refinancing loans. Both products require principal writedowns so the borrowers end up with a loan-to-value ratio below 100%.
