FHA Defaults Dipped in March

The default rate on FHA single-family loans declined slightly in March, to 6.14%, from 6.37% in February, according to the Federal Housing Administration.FHA officials have been hoping for some time that the economic recovery and more hiring would finally curb the number of FHA loans that are 90 days or more past due. The latest FHA portfolio analysis also shows that FHA endorsements of home equity conversion mortgage loans are up 126% and adjustable-rate mortgage endorsements are up 28% during the first seven months of fiscal year 2004. For the period October 2003 to April 2004, HECM endorsements totaled 19,899, compared with 8,810 in the same period in fiscal 2003. Meanwhile, endorsements of one-year ARMs totaled 60,885 at the end of April, compared with 47,424 during the same seven-month period in fiscal 2003. ARM production in May is expected to include the first FHA-insured hybrid mortgages.