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FHA Mortgage Demand Soars

by Peter G. Miller
August 15th, 2007

The last two weeks of July went remarkably well for the FHA. While the mortgage marketplace was largely in shambles, the FHA program saw applications soar 49.1 percent.

Applications to purchase were up 6 percent while refinances grew by 82.6 percent as borrowers sought to dump toxic loans.

Year-to-date, loan applications are up 12.8 percent, refinance activity has grown 24.3 percent while purchase loan volume is actually down 13.4 percent.

What does it all mean? You couldn’t have a better score card for national real estate trends: Home sales are down and borrowers are running from “nontraditional” loans, thus there is a marginal increase in purchase money mortgages for the year. Refinancing is up as borrowers try to avoid huge payment increases that have begun to kick-in with toxic loans.

A prediction: Look for more of the same for the rest of the year. In particular, look for a huge refinancing surge after September — two to three years after 2/28 and 3/27 loans made a few years ago begin to require self-amortizing payments.

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This entry was posted on Wednesday, August 15th, 2007 at 6:33 am and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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