FHA Refinance Applications Plummet in November

January 12, 2011 No Comments »

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FHA refinance loan volume fell 29.9 percent from October to November, according to a FHA Single-Family Outlook released recently by HUD.

A total of 69,062 FHA loan applications were received for refinance purposes, down from 98,544 a month prior, and well below the 112,095 seen the same time last year.

It looks to be another sign that the refinance boom is quickly running out of steam, despite mortgage rates remaining relatively close to historic lows.

The popular 30-year fixed mortgage actually hit its lowest point during the week ending November 11, at a staggering 4.17 percent, but many homeowners probably already took advantage of the low rates beforehand.

Meanwhile, purchase money mortgage applications totaled 63,920, down 6.9 percent from October and 26.6 percent from the 87,142 seen a year earlier.

Reverse mortgages were down just 0.4 percent month-to-month to 8,217, but up a whopping 25 percent from the 6,571 applications seen in November 2009.

Perhaps the recent warning from Consumer Reports will, ahem, reverse that trend.

FHA endorsed a total of 131,258 mortgages for $26.1 billion in November, and as of the end of the month, had 6,745,827 cases in-force with an unpaid balance of $921 billion.

During the month, there were 588,947 FHA loans in serious default (90 days + delinquent).

The default rate jumped to 8.7 percent from 8.0 percent a month earlier, though it was attributed to a reporting problem with some smaller mortgage lenders.

And it’s still 0.6 percent lower than the 9.3 percent default rate seen a year ago.

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