249 Delinquent Conventional Borrowers Go FHA In December

by Peter G. Miller
January 13th, 2008

HUD has some new numbers for FHA mortgage production during the last two weeks of December, the period from December 16th through December 31st:

“During this period,” says HUD, “25,234 mortgages were insured — 21,300 forward mortgages and 3,934 HECM’s. It is interesting to note that 71 percent of the forward mortgages were handled with Lender Insurance, while just 24 percent of the HECM’s were processed that way.

“Of the mortgages endorsed by type, 11,289 were purchase money instruments, 10,011 were refinances and 3,934 were HECM’s.

“With respect to the 10,011 refinanced cases insured, 8,239 mortgages were conventional to FHA conversions, 1,636 prior FHA refinances and 136 conventional to FHA conversions that were delinquent.”

As to FHASecure loans – the financing with origination numbers that are now in dispute – HUD says “while we still do not have enough experience with FHASecure, a different pattern appears to be emerging on the insurance side. Of the 169,080 mortgages insured, 82,512 were purchase cases (49%), 61,882 refinances (37%) and 24,686 HECM’s (15%). Currently, this shift taking place may simply be due to the time between application and endorsement — about 2 months. The high level of conversions in relation to purchases (120,163 vs. 113,098), maybe more noticeable as time passes.”

It’s very easy to understand FHASecure. Just tote up the number of homeowners with delinquent conventional loans who have been able to get FHA financing. There were 136 such borrowers in the second half of December and 113 in the first half, for a total of 249 for all of December.

The good news, of course, is that the FHASecure total for December was higher than the 155 FHASecure originations recorded in November.

The HUD resultsare nowhere near the 33,000 FHASecure loans that the department said it originated.

Meanwhile, the foreclosure situation remains awful. RealtyTrac.com reported that in November, the last month for which we have figures,”a total of 201,950 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported during the month.” That’s up 68 percent over a year earlier. Given that more than 6,700 families a day received foreclosure notices in November, you might think that the HUD program would show far-stronger results.

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