FHA loan delinquencies: Is a perfect storm brewing?

For most people, the foreclosure crisis is a distant memory.

Foreclosure activity, in fact, has been unusually low since the government implemented a national moratorium and an unprecedented mortgage payment forbearance program at the beginning of the COVID-19 pandemic.

Five years later, foreclosure activity is still about 30% lower than it was in 2019, but appears to be gradually working its way back up to pre-pandemic levels. Much of this increased activity is being driven by deteriorating loan performance in the More troubling is that delinquent FHA borrowers are becoming more seriously delinquent and doing so more frequently than their conventional counterparts. In its The reason this is relevant is that metro areas in all these states have experienced falling home prices since the market peak in 2022. Florida and Texas – which each account for over 10% of all FHA mortgage loans – have seen home prices decline between 10 and 20%, likely putting many FHA borrowers effectively underwater on their loans.

But the risk isn’t limited to just those two states: according to But wait! There’s more.

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