US Mortgage Delinquencies Increase in Q1

On Thursday, the Mortgage Bankers Association (MBA) reported that the seasonally adjusted delinquency rate for mortgage loans on one-to-four-unit residential properties increased to 4.44% at the end of Q1, up 18 basis points from 2025Q4 and 40 basis points from a year earlier.

The share of loans in which foreclosure actions were initiated rose to 0.24%, an increase of 4 basis points from the previous quarter.

MBA noted that the results were affected by the expiration of pandemic-era FHA relief options at the end of September 2025 and the implementation of required trial payment plans, during which FHA loans are still considered delinquent for survey purposes until a permanent workout is in place. The industry is also awaiting final guidance and implementation of the VA partial claim program intended to help veterans avoid foreclosure by covering missed payments.

Commenting on the report, MBA Vice President of Industry Analysis Marina Walsh said:

“Mortgage delinquencies increased on an annual basis, with conventional loan delinquencies relatively flat but with notable increases among FHA and VA loans. Last quarter, the delinquency rate for FHA loans was about 900 basis points higher than the conventional delinquency rate, and the VA delinquency rate was almost 225 basis points higher than the conventional delinquency rate. These are the widest spreads since 2021.

We also saw movement of some delinquent FHA and VA loans into later stages of delinquency and into foreclosure. While the overall foreclosure rate remains well below historical averages, the first quarter’s foreclosure inventory rate for FHA loans reached its highest level since the fourth quarter of 2018, and the foreclosure rate for VA loans reached the highest level since the second quarter of 2017.”