Early defaults and claims on FHA-insured loans hit their lowest level in 14 years, according to new Federal Housing Administration data.
Less than 1% of FHA single-family loans originated in June 2011 through May 2013 are 90 days or more past due.
FHA tracks early defaults and claims based on a rolling two-year period via its Neighborhood Watch system to detect problem lenders.
“The early default data underscores the impact of FHA’s exception credit quality,” said Brian Chappelle, a consultant with Potomac Partners. The average credit score on a FHA loan has been around 700 since 2010.
The early default and claim rate peaked at 5% in December 2009. The rate fell below 2% in June 2011 for the first time in the 14-year history of Neighborhood Watch system.
The latest Neighborhood Watch data shows the early default and claim rate fell to 0.97% in May.
Out of the 1.8 million FHA loans originated during the two-year period ending May 31, just 23,000 loans are in default or claim.
The new FHA data also shows the
