New quarterly figures from the Mortgage Bankers Association (MBA) reveal continued worsening loan performance among government borrowers with mortgages insured by the Federal Housing Administration (FHA).

Among all one- to four-unit residential properties with outstanding mortgage balances at the end of the third quarter, delinquencies rose to a seasonally adjusted rate of nearly 4%, the association’s Friday update to its National Delinquency Survey showed.

The percentage of loans on which foreclosure actions were started in the third quarter rose by three basis points to 0.20%.

Though the overall delinquency rate only rose by six basis points on the quarter and seven basis points on the year, the MBA’s vice president of industry analysis, Marina Walsh, underscored in a press release that the serious delinquency rate for FHA loans — those 90 days or more past due — has increased 50 basis points from a year ago.

“The stressors on FHA homeowners include a softer labor market, other personal debt obligations, and increases in taxes, homeowners insurance and other fees that exacerbate already stretched affordability,” said Walsh.

She added that softening home prices in markets around the country “may lessen the ability to sell or refinance.”

The third-quarter results do not reflect the ending of COVID-19 pandemic-era loss mitigation tools for financially distressed FHA borrowers.

After Oct. 1, the partial claim window through which financially stressed FHA borrowers could seek to modify their loans was extended to 24 months, a stark departure from the three to four months that became normalized through pandemic-era assistance.

The MBA says that shift “may affect future quarters” of FHA delinquency rates.