WASHINGTON–For the first time in more than a decade, FHA mortgage delinquencies spiked in the fourth quarter of 2016.
According to the Mortgage Bankers Association, the delinquency rate increased to 9.02% from 8.3% in the third quarter of 2016.
"We had been experiencing great credit quality for so long, and to suddenly see this quarter-over-quarter reversal was a surprise, and we're looking closely at it," said David Stevens, CEO of the MBA, in a statement. "When we see a blip like this, we get concerned about whether that it is a trend. And getting these premiums priced appropriately to provide access to home ownership — but also to protect the taxpayer — is that really important balance that the incoming housing secretary is going to have to focus on with his team to make sure we don't put the taxpayer at risk or the program at risk — and that's the challenge.”
News of the increase in the FHA mortgage delinquencies came at the same time mortgage applications fell to their lowest point in five weeks, data from the MBA said.
According to the MBA, its seasonally adjusted measure of loan applications for mortgage refinancing fell 2.9% to 1,239.6 in the week ended Feb. 10. That was the lowest level since Jan. 6.
The refinance share of mortgage activity dropped to 46.9% of total applications, its lowest level since June 2009, from 47.9% one week earlier, the MBA reported.
One positive: loan application activity to buy a home edged up 1.1% to 223.9 in the latest week, according to the MBA index.
Mortgage rate averages remained largely unchanged last week.