“Claims payments were partially covered by $2.9 billion in premiums and $2.3 billion in property sales,” according to a quarterly report FHA sent to Congress on Friday.
The FHA mortgage insurance fund ended the third quarter with $33.1 billion in total capital resources, down from $36.1 billion in the prior quarter, but up from $31.6 billion in 3Q 2012.
“Net loss rates on claim actions are trending down,” FHA says, due to higher prices on distressed property and nonperforming loan sales.
More FHA servicers are selling REO properties directly to buyers instead of conveying the properties to property managers, which reduces the agency's holding and maintenance costs.
FHA also reported that serious delinquency rates on FY 2007 and FY 2008 loan vintages have peaked and are trending down. Overall, the serious delinquency rate on FHA's single-family portfolio fell to 11.41%, the lowest level in nearly two years.
FHA forward mortgage endorsements totaled 356,000 in the third quarter, up a fraction from the prior quarter. However, purchase mortgage endorsements jumped 15% from 2Q to 181,100 in 3Q.
Meanwhile, credit scores on home purchase loans edged down 2 points from 2Q to 693 in 3Q to the lowest level in four years.