The nation's 'robo-signing' scandal has left the Federal Housing Administration (FHA) with a backlog of nearly 176,000 loans that were in the process of being foreclosed upon at the end of 2010.

"FHA's in-foreclosure inventory is at a historic high and 27% higher than it was one year earlier," the agency said in a 1Q11 fiscal year report released late last week.    

This growing inventory pushed up FHA's serious delinquency rate (90-days or more past due) by 19 basis points during the second half to 8.78% as of Dec. 31.

FHA has investigated foreclosure processing problems facing its servicers, but the Department of Housing and Urban Development (HUD) has held back from taking enforcement actions against firms while negotiations over a global servicing settlement are on-going. 

Meanwhile, the quarterly report shows the quality of newly originated FHA loans continues to improve in terms of credit scores and loan-to-value ratios.

"For the first time since FHA began to require that lenders report credit scores (May 2004), more than 60 % of loans endorsed in the quarter were made to borrowers with credit scores of 680," the federal mortgage insurer said.  FHA endorsed 371,300 mortgages in the yearend quarter.

FHA also experienced a high level of prepayments (163,000) but 109,000 of those (67%) were refinanced back into other FHA products.  

Due to a 25 basis point hike in annual premiums back in October, these FHA-to-FHA refinanced loans will "contribute more revenues to the Mutual Mortgage Insurance Fund over time than was expected," the quarterly report says.

Another 25 basis point hike on newly originated loans is slated for April 18 to "further strengthen FHA's capital reserves," HUD said.

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