WASHINGTON — The delinquency rate of Federal Housing Administration-insured mortgages fell to a historic low in the first quarter, fueling more calls for a reduction in the agency's annual premium.
The Trump administration quashed last-minute plans by the Obama administration to cut the annual premium by 25 basis points, saying it wanted to study the issue first.
Since January, however, the FHA's vitals appear strong, with the total delinquency rate dropping to 8.09% through the first quarter from 9.02% at the end of 2016, according to a survey by the Mortgage Bankers Association. The number of seriously delinquent loans, those 90 days or more past due, dropped to 344,000 from 741,000 in January 2013.
"They have fallen in half, which is certainly very good news," said Brian Chappelle, a mortgage consultant at Potomac Partners.
The positive news is spurring industry groups to renew their calls for a premium cut. Housing and Urban Development Secretary Ben Carson said Tuesday that the department is "looking at all aspects" of the premium cut and will "keep the rate as low as we can consistent with the law."
The FHA could have a capital ratio over 4% on the single-family side (not counting reverse mortgages) in fiscal year 2017, Chappelle said in an interview. The FHA single-family capital ratio reported last November was 3.28%.