A small improvement, a bigger warning
The delinquency rate for one-to-four-unit residential mortgages fell to a seasonally adjusted 4.37 percent of loans outstanding in the second quarter of 2026, according to the Mortgage Bankers Association's National Delinquency Survey — down 7 basis points from the first quarter but up 44 basis points from a year earlier. The share of loans in the foreclosure process rose 3 basis points to 0.67 percent, up nearly 20 basis points from the second quarter of 2025.
Marina Walsh, MBA's vice president of industry analysis, said delinquencies fell slightly across all loan types during the quarter but that "both delinquencies and foreclosures have increased over the past year." She flagged that the seriously delinquent rate — loans 90 or more days past due or in foreclosure, not seasonally adjusted — rose for a fourth consecutive quarter. FHA loans drove much of that increase: FHA serious delinquencies rose more than 225 basis points from a year earlier, which MBA called a pronounced trend. Estate Wire calculation: relative to the roughly 2.06 percent all-loan seriously delinquent rate referenced by MBA, FHA's serious delinquency rate — historically running several percentage points above the conventional rate — is rising far faster than the conventional book.
Why FHA is diverging
Two structural factors explain much of the FHA-specific deterioration. First, pandemic-era FHA loss-mitigation options that had allowed many struggling borrowers to modify loans or pause payments expired at the end of September 2025, removing tools that had been suppressing measured delinquency and foreclosure activity for FHA borrowers specifically. Second, MBA's survey counts loans in a trial payment plan as delinquent until the plan is successfully completed and the loan is permanently modified — an accounting convention that can inflate delinquency counts for loans that are, in practice, being worked out rather than heading to foreclosure.
Walsh also pointed to broader household-finance stress: a labor market that had shown recent signs of weakness, and rising delinquency in other consumer debt categories including student loans, credit cards and auto loans, as factors that may be compounding homeowner distress alongside stretched affordability and slower home-equity accumulation.
The composition of the decline
Within the overall improvement, the 30-day delinquency bucket fell 3 basis points to 2.21 percent and the 60-day bucket fell 5 basis points to 0.73 percent, while the 90-day-or-more bucket actually rose 1 basis point to 1.43 percent — meaning the headline decline was concentrated in the earliest, least severe stage of delinquency, while the most severe bucket kept climbing. That pattern is consistent with a portfolio where new delinquencies are being cured relatively well but a stock of already-troubled loans, disproportionately FHA-insured, is aging further into distress rather than resolving.
MBA's data covers roughly 39 million loans serviced by its members, making it one of the two primary industry benchmarks for mortgage performance alongside the credit bureaus and ATTOM's separate foreclosure-filing tracking, which measures public foreclosure notices rather than servicer-reported delinquency status.
By loan type, the seasonally adjusted delinquency rate fell across the board on a quarterly basis: the conventional-loan rate declined 3 basis points to 2.72 percent, the FHA rate dropped 9 basis points to 11.79 percent, and the VA rate fell 10 basis points to 4.89 percent, according to MBA data reported by HousingWire. The gap between those loan types is itself informative — FHA's delinquency rate of nearly 12 percent runs more than four times the conventional rate, underscoring how concentrated mortgage-performance stress is in the government-insured segment of the market even as every category improved quarter over quarter.