FHA reverse mortgage lenders closed out the first quarter of 2016 with $3.9 billion in total originations, up 7.7 percent from the previous quarter, according to Inside FHA/VA Lending’s analysis of agency data. The Home Equity Conversion Mortgage volume for the first three months is nearly unchanged from the same period in 2015. At 84.6 percent, HECM purchase loans accounted for the bulk of originations. Improving HECM production helped put FHA’s capital level above the 2.0 percent statutory minimum. The capital ratio for FHA forward mortgages was only 1.6 percent at the end of FY 2015, but this was boosted by a 6.4 percent capital ratio in the HECM program. The FHA actuarial report, however, noted the capital instability in the HECM program and suggested taking HECM out of the Mutual Mortgage Insurance Fund. However, unless the MMI Fund’s capital drops to precarious levels ... [ 1 chart ]