The surge in delinquencies on Federal Housing Administration-insured loans
A large 126 basis-point annual increase in FHA delinquencies to 11.88% pushed the total seasonally-adjusted rate for arrears for all loans up 40 bps to 4.44% on the year. Department of Veterans Affairs and conventional delinquencies rose 36 bps to 4.99% and 5 bps to 2.75%, respectively.
Disparities also existed when compared to the previous quarter that highlighted VA and FHA's moves away from more lenient pandemic rules for distressed borrowers.
While the seasonally-adjusted conventional delinquency rate dropped by 14 basis points, the FHA and VA's rose 36 and 39 bps, respectively.
"These are the widest spreads since 2021," Marina Walsh, MBA's vice president of industry analysis, said in a press release.
How delinquencies broke down by stage
Delinquencies rose 17 basis points to 2.24% for loans 30 days late and 14 bps to 0.78% for borrowers two months in arrears. Mortgages that hit the 90-day mark climbed 15 bps to 1.42%.
The rule tightening at FHA and VA also pushed those agencies' low foreclosure inventory rates up to levels not seen since 2018 and 2017, respectively, during the first quarter.
The FHA's foreclosure inventory rate of 1.62% was up 40 basis points from the previous quarter and 70 bps from last year. VA's was 0.79%, an increase of 15 basis points for the quarter and 13 bps when compared to year-ago levels.
The VA has released
The average foreclosure inventory rate for all loans was 0.64%, up 11 basis points from the previous quarter and 15 bps from a year earlier. Conventional loans had a foreclosure inventory rate of just 0.39%, up only 2 basis points on the quarter and 1 bp from a year ago.
