Why is the Delinquency Rate For Commercial Real Estate Surging?

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  • Gene HackerPro Member
    Flipper/Rehabber · Lake Isabella, CA · Member since 2011 · 974 posts · 488 votes
    1y

    The clickbait hyperlink title in your email promoting this story is not a good look.

    0Reply
  • Matthew Adair
    Rental Property Investor · Chicago, IL · Member since 2017 · 11 posts · 1 vote
    1y

    Very informative, thank you! Great tip about reamoritizing a current loan.

    0Reply
  • BiggerPockets TeamPro Member
    OP
    Member since 2026 · 14k+ posts · 5 votes
    1y

    The delinquency rate for residential hasn't budged because HUD has been paying >15% of the mortgages for FHA you absolute chud.

    Originally posted by LLCoolJ94.

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    • Andrew SyriosPro Member
      Moderator
      Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
      1y

      OK... then why is the delinquency rate for conventional mortgages flat?

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 5 votes
      1y

      The internet is free, goofy https://uploads.disquscdn.c...

      Originally posted by LLCoolJ94.

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 5 votes
      1y

      I'm sure this is fine https://uploads.disquscdn.c...

      Originally posted by LLCoolJ94.

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    • BiggerPockets TeamPro Member
      OP
      Member since 2026 · 14k+ posts · 5 votes
      1y

      But to answer your question: First, what has FHA and VA have to do with other liens? Second, there is growing sentiment that Fannie and Freddy are also experiencing higher rates but have been restructuring with HUD the same way FHA is doing. This was more-or-less admitted 1-2 weeks ago.

      So, either you published this article without knowing this information -- which is disconcerting. Respectfully, you should do your homework before publishing. Alternatively, you published this article with omission intentionally -- which is worse. In this case, I'm at a loss for words. Without question, such a thing would violate any code of ethics.

      So, which is it?

      Originally posted by LLCoolJ94.

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    • Anand Vora
      Member since 2023 · 3 posts · 0 votes
      1y

      I am just clarifying if I am reading this right. Does this mean that in 2005, FHA endorsed 21,235 loans with DTI of greater than or equal to 50% and in 2022 it was 193,645?

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    • Anand Vora
      Member since 2023 · 3 posts · 0 votes
      1y

      Also, not sure how accurate this article is on FB but it supports what you're talking about...
      https://www.facebook.com/share/p/19PW7VmsGx/?mibextid=wwXIfr

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    • Andrew SyriosPro Member
      Moderator
      Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
      1y

      Well first, the article is about delinquency on all residential mortgages. You were the one that brought up FHA, which amounts to about 15% of the whole. And yes, delinquency rates on FHA mortgages are fairly high (and have been for a while). But delinquency on conventional is only about 2.6%, adding in VA and FHA and you get to the 3.98% (with just over 1% in serious delinquency) in Q4 of 2024 as the article mentions. And no, there has not been a noteworthy change so far in 2025: https://www.housingwire.com/articles/no-homeowner-delinquency-rates-arent-elevated/

      So that was a unnecessarily long, awkwardly convoluted and weirdly hostile way of admitting I was correct. Thanks, I guess...

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    • James Todd
      Member since 2023 · 14 posts · 0 votes
      1y

      https://uploads.disquscdn.c...
      Ruh roh

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    • James Todd
      Member since 2023 · 14 posts · 0 votes
      1y

      https://uploads.disquscdn.c...

      You sir, are incorrect, and you very well know you are incorrect. I dare say you might well be operating in bad faith.

      One of my favorite movies was The Big Short (I mean, come on, who doesn't love this banger?). But what it, and many have wrong is the notion that subprime mortgages cause the GFC. This is an inaccurate account. Do you, sir, know what it actually was? The answer was a highly speculative market.

      Suggesting to folks that all-is-well in the residential side is misleading, to put it politely. FHA delinquency and fraud -- despite making up a bit over 15% of the market -- will, no doubt, affect the entire market in its entirety. To say otherwise is either obtuse or deceitful.

      Now, that we are also going to look into fraud in the other loans -- as per Pulte (see other reply), we shall see how much rot is in the market.

      None of this addresses other factors affecting the market of course, e.g., student loans, demographics, immigration, the cessation of fed programs giving FHA loans to medicaid recipients, etc.

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    • James Todd
      Member since 2023 · 14 posts · 0 votes
      1y

      Perhaps, an example?

      Was it not announced today the NYAG is being investigated for loan fraud? Did she not, allegedly, take out an FHA in Virginia fraudulently? Did she not, again allegedly, claim she was married to her father to take out a loan for a 7-unit multiplex? Just how many liens are held against her? Just how many folks are leveraged to the gills like this fraudulently?

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    • Andrew SyriosPro Member
      Moderator
      Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
      1y

      LOL is this LLCoolJ's alt account?

      So umm, did Wells Fargo not pay $3.7 billion for loan fraud a few years back? So what? There has definitely been fraud with FHA and others. Doesn't mean the entire SFR market is going to collapse.

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  • Ross WilliamsPro Member
    Investor · Boston MA, Big Sky MT · Member since 2014 · 92 posts · 67 votes
    1y

    Insightful article, especially regarding re-amortization.

    0Reply
  • BiggerPockets TeamPro Member
    OP
    Member since 2026 · 14k+ posts · 5 votes
    1y

    About time we take our economic medicine, wouldn't you say?

    Originally posted by Dave Corsi.

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  • BiggerPockets TeamPro Member
    OP
    Member since 2026 · 14k+ posts · 5 votes
    1y

    Nice article and I especially like that you gave a great solution/idea for folks at the end. Thanks!

    Originally posted by Sonja Sevcik.

    BiggerPockets
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