December FHA Delinquency Report

Will the huge rise in Nov delinquency continue? Will the GSE 200b of MBS buys help?

The impact of the FHA’s new Loss Mitigation procedures came through loud and clear in last months delinquency numbers for the FHA loans in MBS (~7 out of the 8 million outstanding FHAs, and much better performing than the 1 million that are not) with sharp rises in both delinquency and serious delinquency rates due in part to a collapse in partial claims now that borrowers must complete 3 trial payments before they can receive one.

Are similar rises present in the December data and what impact will the 200b in MBS purchases that FNMA/FHLMC are likely to perform in the (nearish?) future have on the delinquent/defaulted FHA loans? This post will both present the December FHA numbers (as always broken down by various portfolio segments so you can understand the internals of whats going on in the portfolio) and explore at a high level the impact of the MBS buys with a more detailed data driven analysis post in the next week or so.

So what happened….