Millions of homeowners with delinquent mortgages

SUMMARY:
Of the 8 million mortgages the FHA insures, 17% were delinquent in July, the highest rate in FHA history. In many metro areas, the delinquency rates of FHA mortgages are above 20%.


DETAILS:
The Federal Housing Administration (FHA) issues many subprime mortgages with “low down payments,” “low closing costs,” and “easy credit qualifying”.  A FICO credit score below 620 is considered “subprime.” The FHA insures mortgages of borrowers with credit scores below that. If the FICO score is below 580, the required down payment is only 10%.

The FHA delinquency rates do include delinquent mortgages that entered a forbearance agreement with the lender, where the lender agreed to not to foreclose for nonpayment.  "Forbearance" is six months, under the CARES Act, extendable by another six months. The borrower isn’t making any payments. But missed interest and principal payments ARE added to the mortgage balance, and will need to be paid some day.

The lenders don’t carry the risk -- the FHA (taxpayers) do. Home price declines during the subprime crisis of the 2007 - 2009 Housing Bust have not happened yet. So no one seems to care about high delinquency rates.

There are about 460,000 people (average) buying a home every month. But there are millions of people behind on their mortgages, including 1.4 million FHA-insured mortgages. There's a boom on one side of the housing market, and a bust forming on the other side.

Fannie Mae, Freddie Mac, the VA, Ginnie Mae, and others are also ehave surging delinquency rates. although not as bad as the FHA.

FHA's 10 Worst Metropolitan Areas         
 # active mortgages    % delinquent
1     Nassau County-Suffolk County, NY                       57,026     27.8%    
2     New York-Jersey City-White Plains, NY-NJ             90,521     27.2%
3     Newark, NJ-PA                                                            53,191     26.3%    
4     Fort Lauderdale-Pompano Beach-Sunrise, FL       49,224     25.8%
5     Poughkeepsie-Newburgh-Middletown, NY             14,493     25.0%    
6     Miami-Miami Beach-Kendall, FL                                55,397     24.4%    
7     Bridgeport-Stamford-Norwalk, CT                               16,047     24.2%    
8     New Orleans-Metairie, LA                                         37,531     22.6%    
9     West Palm Bch.-Boca Raton-Boynton Bch., FL     33,660     22.2%    
10     McAllen-Edinburg-Mission, TX                                19,633     22.0%