Foreclosure Rate on Recent FHA Homes Sees Jump

BY  ON JULY 16, 2018

While foreclosure starts are decreasing across the nation, they actually increased in 40% of local markets, according to ATTOM Data Solutions’ Midyear 2018 U.S. Foreclosure Market Report.  There were 362,275 U.S. properties with foreclosure filings (including default notices, scheduled auctions or bank repossessions) in the first six months of 2018.  This figure is 15% lower than one year ago and down 78%  from a peak of 1,654,634 in the first six months of 2010.  Interestingly, recent FHA loans (originating in 2014-15) have seen above average increases in foreclosure rates.

“Localized foreclosure flare-ups in the first half of 2018 can no longer be blamed on legacy distress left over from the last housing bubble given that nearly half of all active foreclosures are now tied to loans originated in 2009 or later…Instead these local foreclosure increases are typically the result of more recent distress triggers in those markets.”

“We’re also seeing early evidence of gradually loosening lending standards starting in 2014, specifically for FHA-backed loans….The foreclosure rate on FHA loans originated in 2014 and 2015 has now jumped above the average FHA foreclosure rate for all loan vintages — the only two post-recession vintages with foreclosure rates above that overall average.”  Said Daren Blomquist, senior vice president with ATTOM Data Solutions.

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