May 10, 2010

In a recent report, NCSHA affiliate member Moody;s Investors Service finds that State Housing Finance Agency (HFA) single-family whole loan programs rated by Moody’s continued to experience significant increases in both their delinquency and foreclosure rates in 2009.  According to the report:

  • The weighted average percent of HFA loans in foreclosure grew at a particularly rapid pace, rising on average to 1.87 percent as of December 31, 2009, which is 75 basis points higher than the rate on December 31, 2008.
  • The 90+ day delinquency rate of 2.92 percent outpaced the 60+ day delinquency rate for the second year in a row, signaling a continuing build up of delinquencies in the 90+ days delinquent category.
  • Seriously delinquent loans have also risen dramatically in some individual programs, with nine HFA programs having seriously delinquent loans over 6 percent in 2009, up from one program in 2008.
 
The report also states that, “while we expect that the majority of programs will be able to absorb the projected increase in loan losses and maintain their current ratings, the higher stress assumptions could result in negative outlooks and/or lower ratings for some HFA programs.”
 
In comparison to other loans, the report finds that, “on average, as of December 31, 2009, HFA loans have lower 90+ delinquency and foreclosure rates than both the FHA fixed-rate loans in their states and an average of all loan types in their states as measured by data from MBA.  HFA loans are most comparable to FHA loans since the HFAs’ borrowers generally have similar income characteristics and purchase similarly priced homes as the borrowers of FHA insured loans.  However, in most cases HFAs outperform FHA loans in their states due to the HFAs’ active involvement in asset management of the loan portfolio.”