FHA Defaults Decline

The default rate on Federal Housing Administration single-family loans dropped to 6% in April, according to the latest FHA monthly report.This marks the second monthly decline in the FHA default rate (loans 90 or more days past due) since it peaked at 6.37% in February. The default rate in March was 6.14%. Fannie Mae recently reported that the conventional loans it guarantees have a 0.57% default rate. The FHA monthly report also shows that endorsements of adjustable-rate mortgages are up 24% during the first eight months of fiscal year 2004, compared with the same period in fiscal 2003. ARMs endorsement totaled 68,270 as of May, compared with 54,929 in the same period ending May 2003. FHA fixed-rate endorsements were down 19%, to 638,050, as of May. Meanwhile, endorsements of home equity conversion mortgages are up a whopping 127%. HECM endorsements totaled 23,669 as of May, compared with 10,447 during the same eight-month period ending in fiscal 2003.