FHA Quality Pressure Monitor — Industry Compare Ratio Analysis
The FHA Defect Pressure Monitor tracks compare ratios and quality indicators across all active FHA-approved lenders using data from HUD's Neighborhood Watch system. A compare ratio measures a lender's early default and claim rate relative to the national average — a ratio of 100 means the lender matches the national baseline, while a ratio above 150 signals elevated defect risk.
Key Quality Metrics
- Median Compare Ratio — industry-wide 50th percentile
- P90 Compare Ratio — the top 10% threshold for elevated risk
- Lenders above 150 CR — elevated defect risk, facing increased FHA scrutiny
- Lenders above 200 CR — high risk, significant repurchase and indemnification exposure
- Industry claim rate as a percentage of endorsements
- Total FHA endorsements and claims volume
Why This Matters
Elevated compare ratios can trigger FHA scrutiny, increased indemnification requirements, and potential loss of FHA lending authority. For investors and counterparties, high compare ratios signal potential repurchase exposure. Monitoring the industry-wide distribution helps lenders benchmark their quality performance and anticipate regulatory action.
Source: HUD FHA Neighborhood Watch. Data covers active FHA-approved lenders with 10+ endorsements in the analysis period.
Defect Pressure Monitor
Industry-wide defect rates, quality indicators, and lender performance data.
Industry Defect Trends
Critical defect rates from post-closing QC reviews across the mortgage industry
Critical Defect Rate Over Time
Industry-wide critical defect rate — 16 quarters (Q4 2021 to Q3 2025)
Defect Category Distribution
Share of critical defects by category over time (percentage of total defects)
Source: ACES Quality Management Mortgage QC Industry Trends Reports. Defects categorized using Fannie Mae loan defect taxonomy. Critical defect rates represent the percentage of post-closing QC reviews that identified at least one critical manufacturing defect.
FHA Lender Performance
Compare ratio distribution and claim rates across active FHA lenders