FHA Delinquencies Hit Record High

The delinquency rate for Federal Housing Administration-insured mortgages rose to a record high in the first quarter of 1998.According to data released Friday by the Mortgage Bankers Association, the FHA delinquency rate stood at 8.35% -- a 20-basis-point increase year over year. MBA executive vice president Paul Reid said a sharp rise in adjustable-rate mortgage delinquencies contributed to the overall increase in the number of troubled FHA loans. The delinquency rate for FHA-insured ARMs rose 100 bp over the past 12 months. Year over year, the FHA fixed-rate mortgage delinquency ratio increased 57 bp, MBA data show. Meanwhile, the overall delinquency rate for conventional and government-backed residential loans rose 13 bp to 4.47% in the first quarter -- the highest rate recorded by the MBA since the third quarter of 1995. Mr. Reid told reporters that an increasing number of the MBA's members are originating subprime mortgages and loan data collected from these lenders are inadvertently being mixed with data gathered from "A" paper mortgage companies. "Subprime delinquencies are starting to show up in our data, which is one reason why the overall rate is higher," Mr. Reid added. "We are working to separate out the B&C data."