The Federal Housing Administration reports that the serious delinquency rate for mortgages in its portfolio in the first quarter of 2011 has dropped to 8.29 percent from 8.9 percent a year ago. FHA attributes the decline to higher quality mortgages that were originated from 2009 through 2011.
"The 2009 book is now starting to enter its peak default period (years two through four), but it is expected to perform much better than did its predecessors," the FHA reported. "At this stage in its seasoning, the 2009 book has claim rates that are less than half those seen at the same stage for the 2005-2008 books."
The agency says that mortgage loans that were originated in 2007 and 2008 now only make up about 15 percent of their active profile. The delinquency rate for loans originated in 2007 is 22.44 percent and the delinquency rate for loans originated in 2008 is 19.65 percent. Loans originated before 2007 have a delinquency rate of 11.59 percent.
Almost half of all mortgage loans in its current active portfolio are loans that were originated between 2009 and 2011.
FHA provided a total of $72.1 billion in new insurance in the first quarter of 2011, up from $71.4 billion in the previous quarter, however, the agency says they expect insurance volumes to decline in the next quarter as the number loan originations also declined.
Compared to a year ago, FHA insurance in the first quarter of 2011 fell 33 percent which is attributed to a 44 percent decrease in home purchase originations and a 16 percent decease in refinance originations.
"FHA single-family insurance activity in the quarter was marked by a decline in home-purchase endorsements, which was mostly offset by an increase in refinance activity," the FHA said. Still, dollar volumes in this quarter were more than 16 percent below the year-earlier period level of $86.4 billion, the agency added.
Tags: FHA, delinquency rate, quality mortgages, portfolio, mortgage loans, insuance volumes, home purchase originations, refinance originations
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