New data by the Mortgage Bankers Association show that the serious delinquency rate on FHA-insured single-family loans fell to 7.57% in the second quarter—down 145 basis points from their peak in 2011.
The percentage of FHA loans 90 days or more past due or in foreclosure peaked at 9.02% in the fourth quarter of 2011.
Mortgage consultant Brian Chappelle pointed out that the biggest drop in the
“What is particularly encouraging is that the serious delinquency rate fell 42 basis points since the first quarter and is now at the lowest level (7.57%) since the first quarter of 2009,” Chappelle said.
The consultant with Potomac Partners also noted that the quality of recent FHA originations is improving the performance of the FHA portfolio and diluting the impact of legacy loans. FHA loans originated in fiscal years 2005-2008 comprise just 13% of FHA’s total single-family loan portfolio as of June 30.
FHA commissioner Carol Galante recently told a Senate panel that FHA servicers are using HAMP modifications more often, which offers “deeper payment relief to struggling FHA borrowers” and reduces new serious delinquencies.
“Our efforts provide effective and efficient loss mitigation, in combination with improving economic conditions, are working—reducing losses to the FHA mortgage insurance fund,” the commissioner testified on July 24.
