The residential mortgage delinquency rate as of the end of the first quarter stood at about 4.04% of all loans outstanding, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
That’s up 6 basis points compared with the fourth quarter and up 10 basis points from one year ago, according to the report.
The percentage of loans on which foreclosure actions were started in the first quarter rose by 5 basis points to 0.20%.
“There were mixed results for mortgage performance in the first quarter of 2025 compared to the end of 2024,” says Marina Walsh, vice president of industry analysis for the MBA, in a statement. “Delinquencies on conventional loans increased slightly, while mortgage delinquencies on FHA and VA loans declined. Foreclosure inventories increased across all three loan types, and particularly for VA loans. Despite certain segments of borrowers having difficulty making their mortgage payments, the overall national delinquency and foreclosure rates remain below historical averages for now.”
“The percentage of VA loans in the foreclosure process rose to 0.84 percent, the highest level since the fourth quarter of 2019,” Walsh adds. “The increase from the previous quarter marks the largest quarterly change recorded for the VA foreclosure inventory rate since the inception of MBA’s survey in 1979.”
Walsh noted that a voluntary VA foreclosure moratorium was in effect through the end of 2024 to allow time to implement the Veterans Affairs Servicing Purchase (VASP) Program.
That program has since ended without a replacement loss mitigation option approved by Congress.
Further increases in the foreclosure rate could result if economic conditions worsen and loan workout options are unavailable.
States with the largest year over year increases in their overall delinquency rate included Florida (46 basis points), South Carolina (26 basis points), Georgia (25 basis points), Delaware (25 basis points), and Wyoming (24 basis points).
Photo: Andy Beales