06/15/2026
Cromford Daily Observation 6/13/26:
FHA LOAN DELINQUENCY RATES SKYROCKET
June 13, 2026 by Mike
The latest data from the FHA show that the share of loans more than 90 days delinquent increased by nearly 200 basis points between October 2025 and February 2026. A simplistic TLDR might lead us to conclude that low-end homeowners are becoming overstressed financially and that a wave of foreclosures could soon emerge.
But this is a false conclusion. The reported increase is almost entirely due to a technical change, rather than an actual deterioration in repayment activity. Often, when an FHA borrower falls behind on their payments, they enter into a “home retention” program. Previously, such borrowers were recorded as current upon entering the program, but starting in October 2025, a new rule requires borrowers to make three consecutive payments before their loans can be marked as current. This single rule change accounted for 92% of the increase in the serious delinquency rate, according to a study by the Center for Responsible Lending.
Furthermore, about 94% of seriously delinquent FHA borrowers have significant home equity, with the median borrower having almost $100,000 in equity. This equity cushion should allow most delinquent borrowers who cannot afford their payments to ultimately avoid foreclosure by selling their home instead. The typical YouTube real estate pundit can and probably will make a huge fuss about the apparent dramatic rise in delinquency, but we know that, in fact, there is little sign that anything significant is changing. Of course, the delinquency rate for FHA loans is almost always much higher than for other loan types, but we are not seeing any corresponding rise in FHA loans moving into the foreclosure process – at least for now.
