Residential delinquencies are on the rise again and trouble could be afoot in FHA foreclosures, according to new second quarter figures compiled by the Mortgage Bankers Association.
MBA reported Thursday morning that FHA foreclosures started spiked to 1.53%— a 60% jump from 1Q and the highest reading in several years.
FHA analyst Brian Chappelle is predicting an increase in agency foreclosures in the months ahead as processing backlogs are cleared. “Over the next six months we will inevitably see claims spike since the reason for the logjam has been removed,” he told National Mortgage News.
Overall, FHA delinquencies—which exclude the foreclosure numbers—dropped slightly to 11.89% from 12% for the period ending March 31. Serious delinquencies rose two basis points to 9% while the FHA foreclosure inventory increased to 4.23% from 3.83%
There are roughly $1.2 trillion in outstanding FHA and VA loans in the U.S. with FHA accounting for a large majority of that number. MBA’s calculations mean somewhere in the neighborhood of $100 billion of FHA loans are in arrears, at least.
At June 30, the delinquency rate on all outstanding residential mortgages rose to 7.58% from 7.4% at the end of 1Q. A year ago delinquencies were higher at 8.44%.
The nation’s foreclosure inventory fell to 4.27% from 4.38% at March 31.
According to calculations made by National Mortgage News, $675 billion of home mortgages were in some form of arrears at June 30. This figure excludes foreclosures.
