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Mortgage Delinquencies Increase Slightly in the First Quarter of 2025

Industry Update
May 13, 2025

Source: Mortgage Bankers Association

The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.04 percent of all loans outstanding at the end of the first quarter of 2025, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate was up 6 basis points from the fourth quarter of 2024 and up 10 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the first quarter rose by 5 basis points to 0.20 percent.

“There were mixed results for mortgage performance in the first quarter of 2025 compared to the end of 2024. Delinquencies on conventional loans increased slightly, while mortgage delinquencies on FHA and VA loans declined,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “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.”

Added Walsh, “The percentage of VA loans in the foreclosure process rose to 0.84 percent, the highest level since the fourth quarter of 2019. 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.

Key findings of MBA’s First Quarter of 2025 National Delinquency Survey:

Compared to last quarter, the seasonally adjusted mortgage delinquency rate increased for all loans outstanding. By stage, the 30-day delinquency rate increased 11 basis points to 2.14 percent, the 60-day delinquency rate decreased 3 basis points to 0.73 percent, and the 90-day delinquency bucket decreased 2 basis points to 1.17 percent.

By loan type, the total seasonally adjusted delinquency rate for conventional loans increased 8 basis points to 2.70 percent over the previous quarter. The total FHA seasonally adjusted delinquency rate decreased 41 basis points to 10.62 percent, and the total VA seasonally adjusted delinquency rate decreased 7 basis points to 4.63 percent.

On a year-over-year basis, total mortgage delinquencies increased for all loans outstanding. The delinquency rate increased 8 basis points for conventional loans, increased 23 basis points for FHA loans and decreased 3 basis points for VA loans from the previous year.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the first quarter was 0.49 percent, up 4 basis points from the fourth quarter of 2024 and 3 basis points higher than one year ago.

The non-seasonally adjusted seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 1.63 percent. It decreased 5 basis points from last quarter and increased 19 basis points from last year. The seriously delinquent rate decreased 3 basis points for conventional loans, decreased 14 basis points for FHA loans, and decreased 7 basis points for VA loans from the previous quarter. Compared to a year ago, the seriously delinquent rate increased 5 basis points for conventional loans, increased 80 basis points for FHA loans and increased 50 basis points for VA loans.

The five states with the largest year over year increases in their overall delinquency rate were: Florida (46 basis points), South Carolina (26 basis points), Georgia (25 basis points), Delaware (25 basis points), and Wyoming (24 basis points).

For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage.