Mortgage Delinquencies Increased in Q1 2026

From the MBA: Mortgage Delinquencies Increase in the First Quarter of 2026

The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.44 percent of all loans outstanding at the end of the first quarter of 2026, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate was up 18 basis points from the fourth quarter of 2025 and up 40 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the first quarter rose by 4 basis points to 0.24 percent.

“Mortgage delinquencies increased on an annual basis, with conventional loan delinquencies relatively flat but with notable increases among FHA and VA loans,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “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.”

Added Walsh, “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.”

Walsh noted that results have been affected by the expiration of pandemic-era FHA relief options at the end of September 2025 and by 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. Meanwhile, the industry also awaits the final guidance and implementation of the VA partial claim program to help veterans avoid foreclosure by covering missed payments.

emphasis added

The following graph shows the percent of loans delinquent by days past due. Overall delinquencies increased in Q1. The overall delinquency rate is slightly above pre-pandemic levels.

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