New report found that 14.7% of 7.6M FHA mortgages were delinquent in May. Additional 10.5% of those loans delinquent by more than 90 days and at risk of moving into default.

While Home Values Rising, Risk of Mortgage Default Also Continuing for Millions of Homeowners

A new report from the American Enterprise Institute indicated that 14.7% of the 7.6M mortgages backed by the Federal Housing Administration (FHA) were delinquent in May.  Additionally, the FHA report indicated that 10.5% of those FHA loans were delinquent by more than 90 days and were therefore at risk of going into default.

Unwanted Options for Delinquent Mortgage Holders to Consider

Edward Pinto, American Enterprise Institute Housing Center Director, and co-author Tobias Peter wrote in this latest report, “If a modification is unable to address the delinquency, the next option is for the borrower to sell the home. Given the rapid level of home price appreciation, this alternative should allow many distressed owners to avoid foreclosure, pay off the mortgage, cover selling expenses and maintain one’s credit record.”

Of course, if selling the house is not feasible or if the house has been abandoned, the only other option for the delinquent mortgage holder would be to go into foreclosure.

Cities and Neighborhoods Most At-Risk of Foreclosure

Atlanta GA (Sandy Springs, Alpharetta)

  • Total of delinquent loans – 17.2%
  • Total of seriously delinquent loans – 12.5%
  • Percentage o loans backed by FHA – 17.4%

Houston TX (The Woodlands, Sugar Land)

  • Total of delinquent loans – 17.4%
  • Total of seriously delinquent loans – 12.8%
  • Percentage of loans backed by FHA – 21%

Chicago IL (Naperville, Evanston)

  • Total of delinquent loans – 18.8%
  • Total of seriously delinquent loans – 13.8%
  • Percentage of loans backed by FHA – 19.3%

Thanks to American Enterprise Institute.

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