FHA delinquency rate surges in fourth quarter

average delinquency rate federal housing administration-Insured mortgage loans jumped 131 basis points from the previous quarter to 10.81%, the highest level since the third quarter of 2021.

FHA loans typically perform worse than other mortgages because borrowers have lower incomes and are more susceptible to financial stress, but the jump between the third and fourth quarters was even larger than the 55 basis point jump in the third quarter big. Overall home loan growth in the FHA sector also increased more than five times more than 26 basis points to 3.88%.

The rise in FHA delinquencies could signal stress in the broader mortgage market, Marina Walsh, vice president of industry analysis for the Mortgage Bankers Association, said in a release that across all categories The number of loans has now risen for two consecutive quarters.

“While overall delinquency rates remain very low compared to historical averages, new loans are entering delinquency at an accelerated pace, with some loans entering the later stages of delinquency,” she said, noting that strong employment has helped limit most types of delinquency. Distress Mortgage.

However, for some, college debt obligations have restarted after the pandemic-related respite and are outpaced by increases in credit card borrowing and other forms of consumer debt as bank account balances decline, Walsh said .

Conventional mortgages, which tend to be the strongest performers, had their best quarter this quarter, with the delinquency rate rising just 11 basis points to 2.61%. The arrest rate for home loans guaranteed by the Department of Veterans Affairs increased 31 basis points to 4.07%.

The 30-day delinquency rate increased 7 basis points this quarter to 2.10%. The proportion of borrowers who are 60 days overdue increased by 11 basis points and remained at a low level of 0.73%. The delinquency rate for seriously delinquent borrowers who are 90 days past due increased 7 basis points to 1.05%.

Geographically, the five states with the largest increases in delinquency rates this quarter were Louisiana, which increased by 77 basis points; West Virginia, which increased by 53 basis points; and Illinois and Texas, which increased by 44 basis points. basis points; and New Mexico, which grew 42 basis points.

MBA’s delinquency rate, which excludes foreclosures, averaged 5.25% from 1979 to the end of 2023. All delinquency rates were below last year’s fourth quarter, when the average delinquency rate was 8 basis points lower than a year ago now.

The fourth-quarter foreclosure rate fell 2 basis points to 47 basis points, the lowest level since the fourth quarter of 2021.

VA Appeal Temporary foreclosure moratorium in the fourth quarter to allow time for follow-up plans for the pandemic relief package. This may be one of the reasons for the slight decrease in this category.

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