The refinancing boom has given a much-needed boost to production of mortages insured by the Federal Housing Administration.
The fiscal year ended Sept. 30 was the second most active ever for FHA lending, Secretary of Housing and Urban Development Henry Cisperos said this week.
Nicholas Retsinas, assistant HUD secretary, added that FHA loans managed to gain some market share, though precise numbers are not yet available.
An increase in share would be a marked turnaround for the FHAm which has lost much ground in recent years. It insured only 5.6% of new home loans last year, down from 13% in 1990.
'Not Where We Want It'
But the mortgage banking industry, which orginates the bulk of FHA loans, remains concerned about the volume.
"While it's improving [FHA] is still not where we want it to be, or where [the agency] wnats it to be," said Mortgage Bankers Association staff vice president Brian Chappelle. "FHA's role is a hiccup, and that's a shame."
The FHA's single-family loan volume grew 42% over the previous fiscal year, to 938,351 loans. Almost 93% of the increase came from refinancings, HUD officials said.
Meanwhile, the volume of loans for multifamily housing grew 75% over the previous year to 526 loans. About 82% of that increase came from refinancings.
The agency's most active year was 1987 when it insured 1,456,279 loans.