Defaults Rise on FHA-Insured Mortgages: Report

Defaults on mortgages insured by the Federal Housing Administration (FHA) rose in February from a year ago, the Wall Street Journal reported, quoting a FHA spokesman.

At the end of last month, 7.46 percent of FHA-insured loans were "seriously delinquent", up from 6.16 percent a year earlier, the spokesman told the paper. Seriously delinquent mortgages include loans that are 90 days or more overdue, in foreclosure or bankruptcy.

The FHA, which is part of the Department of Housing and Urban Development, insures mortgage lenders against the risk of defaults on home mortgages that meet its standards. FHA-insured loans are available on loans with down payments of as little as 3.5 percent of the home's value.

As of January, the cities with the highest FHA default rates were Punta Gorda, Fla., at 18 percent; Detroit, 15.6 percent; Flint, Mich., 15.1 percent; Fort Myers-Cape Coral, Fla., 15 percent, and Elkhart-Goshen, Ind., 12.1 percent, according to report by the Department of Housing and Urban Development.

Foreclosed FHA homes owned by the Department of Housing and Urban Development totaled 39,687 in January, up 22 percent from the same period last year, the paper said.