Newly initiated foreclosures by the Federal Housing Administration (FHA) jumped 247% in April from a year earlier, while the overall number of foreclosure starts fell 3.1% in the same period.
A report released Thursday by Lender Processing Services showed that FHA foreclosure starts jumped to 63,129 in April, from 18,154 a year ago. FHA foreclosure starts rose 73% in April from 36,311 in March, LPS found.
Herb Blecher, a senior vice president for LPS Applied Analytics, attributed the increase to a near-doubling of defaults on loans originated in 2008 and 2009. FHA loan volumes tripled in 2008, which, "even with low default rates, can produce larger numbers of foreclosure starts," Blecher said in a press release.
An FHA spokesman did not respond to requests for comment.
Still, the agency appears to be the exception in advancing foreclosures.
Housing experts had predicted that banks would jumpstart the foreclosure process after completing a $25 billion settlement with federal and state regulators. But instead, the settlement appears to have dramatically slowed the foreclosure process, as mortgage servicers work with troubled borrowers to modify loans or complete short sales.
Overall mortgage delinquencies rose slight to 7.1% in April, while 4.1% of all loans are in the foreclosure process, unchanged from a year earlier, the report found