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Mortgage delinquency risk hits all-time high

AEI's index rose on FHFA increasing loan level risks

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The National Mortgage Risk Index for home purchase loans hit a new series’ high of 11.89% for April, up from 11.50% in March. 

The NMRI is an objective mortgage risk measure, created by the American Enterprise Institute’s Center on Housing Risk. It represents an estimated cumulative default rate for new home purchase loans under the assumption of stress conditions from 2007-2012.  

The increase was due to the Federal Housing Finance Administration, which had higher market share and increasing loan level risk.  The FHA’s April home purchase volume was 41,756, an increase of 36% over March. 

By contrast Fannie Mae and Freddie Mac had April home purchase volume of 101,050, an increase of 24% over March and down 4% from the same month last year. 

Overall April purchase volume was up 27% over March, the result of the spring buying season ramping up.

The April NMRI for FHA loans also hit a new series high of 25.12% up from 24.77% in March. 

The April NMRI for Fannie Mae and Freddie Mac loans declined slightly to 5.93% from 6.00% in March.

An overall index level of less than 6% is indicative of conditions conducive to a stable national market.  For more information about the NMRI, please visit HousingRisk.org.

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