New Orleans Overdues Rise Above 20%

The percentage of homeowners in hurricane-stricken New Orleans that are 90 days or more past due on their mortgage payments is moving above 20%, according to data on Federal Housing Administration-insured mortgages.After Hurricane Katrina pounded the city on Aug. 29 and caused widespread flooding, the default rate on all FHA single-family loans in the New Orleans metropolitan statistical area had nearly doubled, to 15.7%, as of Oct. 31. (Loans 90 days or more past due are considered to be in default.) Meanwhile, more recent Neighborhood Watch data show that the default rate on FHA loans originated in the past two years hit 20.4% as of Dec. 31. The FHA created Neighborhood Watch to track lenders with high early default rates. "The 90-day delinquencies are now starting to show up in Neighborhood Watch," FHA consultant Bud Carter said. Prior to the hurricane, New Orleans ranked 37th in terms of FHA defaults. Now it is ranked first in the nation. The MSA defined by the Mississippi coastal cities of Biloxi, Gulfport, and Pascagoula is ranked second, with a 14.0% default rate as of Oct. 31.