FHA Endorsements Hit 9-Year High

The Federal Housing Administration endorsed 94,069 single-family mortgages in June, the highest number in nine years, according to the agency. Refinance transactions totaled 48,200 and purchase transactions 41,600. The endorsements also included 4,600 FHA-insured reverse mortgages. The Mortgage Bankers Associations reported that demand for FHA-insured and Department of Veterans Affairs-guaranteed loans is increasing and nearly 36% of mortgage applications submitted in June were for government loans. The FHA and VA share of mortgage applications is the highest in 19 years. FHA and VA offer homebuyers low-downpayment loans that conventional lenders can't match because of the capital constraints on the private mortgage insurers. FHA and VA benefited from rising mortgage rates in June, which reduced refinancings and strengthened their hold on the purchase mortgage market. "FHA's share goes up or down with the refinance business," said mortgage banking consultant Brian Chappelle of Potomac Partners in Washington.