“Early-stage delinquencies remain subdued, and while serious delinquencies including foreclosures have reached pre-pandemic levels, new default activity has leveled off in recent months — a positive sign. New FHA defaults, which have been a focal point of market attention, were down 15% year over year in June. These trends are encouraging, even as the market continues to warrant close monitoring.”
Serious delinquencies — loans 90 or more days past due but not in foreclosure — fell to 570,000 in June, a six-month low, extending the seasonal improvement that began in March.
Roll rates also improved, with the number of borrowers entering 30- and 60-day delinquency declining on both a monthly and annual basis.
For brokers who have been monitoring late-stage stress in government-backed loan portfolios, June’s data marks the first clear annual improvement in new FHA defaults in several years.
Foreclosure activity inches toward pre-pandemic norms
The encouraging headline numbers sit alongside a continued climb in foreclosure activity. The share of mortgages in active foreclosure reached 0.53% in June, a six-year high, as activity normalizes from emergency-era lows.
