The Bad News Continues on FHA Delinquencies

Nearly 9% of all Federal Housing Administration-insured single-family loans are 90-days or more past due, according to the agency's latest monthly activity report. The November report shows that FHA has a 8.94% default rate, up from 6.53% in November 2008. The insurer is trying to keep its capital reserves in the black and there's renewed speculation in the industry that it's only a matter of time before HUD will be forced to ask Congress for a bailout of the fund. To date, FHA officials have said they can avoid a bailout. Later this month, agency officials are expected to unveil several moves to tighten underwriting and possibly increase mortgage insurance premiums. Meanwhile, FHA lenders originated $26.6 billion in single-family loans in November, down 11% from the previous month, according to the activity report. Purchase mortgage transactions totaled $15.8 billion and comprised 60% of FHA originations.