In the fourth quarter of 2024, mortgage delinquencies saw a slight increase, but their composition highlighted significant trends. FHA and VA loans are experiencing heightened delinquency rates, with FHA seriously delinquencies reaching 4.12%, contrasted against just 1.14% for conventional loans. The disparity has led to an 841 basis point spread between FHA and conventional delinquencies. Although overall delinquency rates are rising, conventional loans maintain strong performance, indicating a stark difference in risk across loan types. Walsh's analysis at the MBA Servicing Solutions Conference underscores these variations and their implications for the housing market.
The seriously delinquent rate for FHA loans reached 4.12%, three times higher than the 1.14% rate for conventional loans, highlighting significant disparities in loan performance.
Marina Walsh noted that although mortgage delinquencies rose slightly, the composition changed significantly with FHA and VA delinquencies increasing at a faster pace.
The basis-point spread between the FHA delinquency rate and conventional loans has reached 841 basis points, indicating a concerning trend in loan defaults.
Conventional loans are performing much better than FHA and VA loans, with a minor increase in delinquency rates compared to larger jumps in FHA and VA rates.
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