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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 52 June 2025 J O U R N A L delinquent bucket dropped 2 basis points to 1.17%. • Compared to the previous quarter, the overall seasonally adjusted delinquency rate for conventional loans rose by 8 basis points to 2.70%. Seasonally adjusted delinquency rates fell 41 basis points to 10.62% for the FHA and 7 basis points to 4.63% for the VA. • Overall mortgage delinquencies for all outstanding loans rose year over year (YoY). Compared to the prior year, the delinquency rate rose 8 basis points for conventional loans, jumped 23 basis points for FHA loans, and fell 3 basis points for VA loans. • Loans that are at least one payment past late are included in the delin- quency rate; however, loans that are in the foreclosure process are not. At the conclusion of Q1, the percentage of loans in the foreclosure process was 0.49%, which was 3 basis points higher than a year ago and 4 basis points higher than in Q4 2024. • The percentage of loans that are 90 days or more past due or in the foreclosure process, known as the non-seasonally adjusted seriously delinquent rate, was 1.63%. It rose 19 basis points from the previous year and dropped 5 basis points from the previous quarter. • Compared to the prior quarter, the seriously delinquent rate dropped 3 basis points for conventional loans, 14 basis points for FHA loans, and 7 basis points for VA loans. The seriously delinquent rate went up 5 basis points for conventional loans, 80 basis points for FHA loans, and 50 basis points for VA loans over the previous year. Walsh pointed out that in order to give the Veterans Affairs Servicing Purchase (VASP) Program time to be implemented, a voluntary VA foreclosure moratorium was in place through the end of 2024. Since then, that program has ceased without a congressionally ap- proved successor loss mitigation option. If the economy deteriorates and there are no choices for debt workouts, the foreclo- sure rate may rise much more. "The percentage of VA loans in the foreclosure process rose to 0.84%, the highest level since the fourth quarter of 2019," Walsh said. "The increase from the previous quarter marks the largest quarterly change recorded for the VA foreclosure inventory rate since the inception of MBA's survey in 1979." The top five states with the largest YoY year increases in their overall delin- quency rate were: 1. Florida (46 basis points) 2. South Carolina (26 basis points) 3. Georgia (25 basis points) 4. Delaware (25 basis points) 5. Wyoming (24 basis points) "Despite certain segments of bor- rowers having difficulty making their mortgage payments, the overall national delinquency and foreclosure rates re- main below historical averages for now," Walsh said. CONSUMER CONCERNS PERSIST AS BANKRUPTCY FILINGS INCREASE A ccording to data from Epiq AACER, there were 30,961 indi- vidual Chapter 7 applications in April 2025, which was an estimated 16% increase over the 26,781 submissions in April 2024. "The 9% increase in total bankruptcy filings in April 2025, particularly the 16% surge in individual Chapter 7 filings, reflects the mounting financial strain on households, elevated prices, and higher borrowing costs," said Michael Hunter, VP of Epiq AACER. "While commercial filings have softened, the uptick in small business Subchapter V elections signals persistent distress among smaller busi- nesses navigating an uncertain economic landscape." Per the recent report, the overall number of individual bankruptcy filings rose from 43,030 in April 2024 to 47,323 in April 2025—an estimated 10% rise. Com- pared to the 16,175 individual Chapter 13 applications in April of last year, there were 16,246 individual Chapter 13 filings in April of 2025. "April 2025's data underscores a con- tinued rise in individual bankruptcies, with 47,323 filings driven by economic pressures like inflation and geopolitical uncertainties," Hunter said. "Although commercial Chapter 11 filings declined, the 4% growth in subchapter V filings highlights the ongoing challenges for small businesses seeking relief, pointing to a broader need for accessible restruc- turing options." Key Highlights: • In April 2025, there were 49,588 bankruptcy filings overall, which was 9% more than the 45,615 filings in April 2024. • In contrast, the overall number of com- mercial files in April decreased by 12% to 2,265 from 2,585 in the prior year. • In April 2025, the number of com- mercial Chapter 11 bankruptcy filings dropped by 20%, from 542 in April 2024 to 434 in April 2025. • However, the number of small busi- ness registrations recorded as sub- chapter V elections under Chapter 11 rose from 210 in April 2024 to 218 in April 2025—a 4% increase. "While filings still remain below pre-pandemic levels, elevated prices, higher borrowing costs, and uncer- tain geopolitical events compound the economic challenges faced by families and businesses," said Amy Quackenboss, Executive Director for ABI. "We look forward to providing Congress with the research, information, and statistics to reestablish higher debt thresholds for financially distressed small businesses and consumers to access the fresh start of bankruptcy."