Chart 1: Recent Mortgage Delinquencies for Higher-Risk Loans Have Reached Historical Highs

Data Source: Mortgage Bankers Association (Haver Analytics)

Vertical Axis: Loans Past Due as a Percentage of Total Loans (scale = 0 to 12 percent)

Horizontal Axis: This is a time series showing quarterly data from the first quarter of 1979 to the third quarter of 2001

This line graph shows the percentage of delinquent FHA-insured and conventional mortgages between 1979 and 2001. The share of delinquent FHA-insured mortgages approximated 6 percent in 1979, then trended steadily upward until 1985, when it briefly peaked at nearly 8 percent. It moderated for a few years, but then trended upward throughout the 1990s, rising sharply in 2000 and 2001, when it ultimately reached over 11 percent during the third quarter of 2001. In contrast, only 2.7 percent of conventional mortgages were delinquent in 1979. That figure rose to approximately 4 percent between 1983 and 1987, then declined slightly to between 2.8 and 3.2 percent until 1991 when it peaked briefly at 3.4 percent. It then moderated again through much of the 1990s to between 2.5 and 3 percent, and then turned upward in 2000 and 2001, rising to 3.1 percent as of third quarter 2001. Over the nearly 23-year period, the FHA-insured mortgage delinquency ratio was at least twice as high as the conventional mortgage delinquency ratio. However, throughout 2000 and 2001, the delinquency ratio for FHA-insured loans grew even faster than the ratio for conventional loans. By the third quarter of 2001, the FHA delinquency ratio was nearly four times higher than that of conventional mortgages.