PARAMOUNT MORTGAGE - LENDER'S BLOG

FHA Sets High Bar: 2 Million Loans

Providence, RI - The Federal Housing Administration (FHA) is starting a new fiscal year with a goal of reaching two million insured loans during FY 2009. Mark Fogarty, National Mortgage News reported on October 5th that if this benchmark was achieved it would break all single year records in the history of the agency.

Two million insured loans would be more volume than FHA did for calendar years 2005, 2006 and 2007 combined. Gerald Glavey, director of processing and underwriting at the Department of Housing and Urban Development, presented his data at the New England Mortgage Banking Conference. Mr. Glavey indicated that a good year for the insurer would be about one million loans.

FHA has increased its market share to a new high of 25% of the country's mortgage market. This is up 3% from just a few years ago. For first-time homebuyers, the agency has an 80% share of the market.

This number shows that the agency is on track to fulfill its mandate providing low and moderate income families the means to find safe and affordable housing options, while allowing for a competitive home sales market.

Currently, FHA borrowers' FICO scores now average 693, stated Glavey. That is a gain of 60 points from just two years ago when the typical borrower had a score of 633. At that time nearly 50% of FHA borrowers had FICO scores under 620. Presently, just 7.5% of all FHA borrowers have scores 620 and under.

For calendar year 2008, FHA insured nearly 1.5 million loans, more than double the 580,000 it did in 2007. In 2006, volume was just above 500,000 loans and in 2005 volume was slightly higher at 523,000 mortgages.

Mr. Glavey presented additional information to the conference about FHA's reverse mortgage program which insured 115,000 Home Equity Conversion Mortgages in 2008, more than double the 48,000 it did in 2005.

The agency insured 810,000 mortgages last year, and 542,000 refinances, of which 431,000 were originally non-FHA loans. The number of 2008 refinances exceeded what the agency completed for the combined years of 2005, 2006, and 2007.

Link: FHA Sets High Bar