August 5, 2011 (Shirley Allen)
Foreclosure timelines continue to lengthen with the average loan in foreclosure now being delinquent for a record 587 days according to the June Mortgage Monitor Report by Lender Processing Services (LPS).
More than 40 percent of the homeowners whose loans were 90+ days past due have not made a payment in more than a year and 35 percent of the loans in foreclosure have been delinquent for more than two years.
The disparity in the foreclosure timelines between judicial and non-judicial states also continues to grow. The foreclosure pipeline ratio, the number of loans either 90+ days delinquent or in foreclosure divided by the six-month average of foreclosure sales, is more than three times higher in states that use the judicial foreclosure process than the states that use the non-judicial process.
Foreclosure starts gained momentum in June as the number of starts increased by more than 10 percent. For the year, foreclosure starts are still down 16.4 percent. More trouble may be brewing though as delinquencies were up 2.4 percent from May to June. The number of loans that were 90+ days delinquent or in foreclosure stood at 4.1 million at the end of June, 12.8 percent higher than in June of last year.
LPS also examined the possible impact of what the proposed Qualified Residential Mortgage (QRM) provisions could have had on loans that have been originated since 2005 and found that nearly half of the loans could have been ineligible under the proposed QRM rules, far higher than the 30 percent many industry analysts have predicted that QRM will affect if implemented.
Earlier highlights from LPS’s “First Look” report include:
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 8.15% compared to 7.96% in May 2011
Month-over-month change in delinquency rate: 2.4% compared to -0.1% in May 2011
Year-over-year change in delinquency rate: -14.7% compared to -18.3% in May 2011
Total U.S foreclosure pre-sale inventory rate: 4.12% compared to 4.11% in May 2011
Month-over-month change in foreclosure presale inventory rate: 0.2% compared to -0.7% in May 2011
Year-over-year change in foreclosure presale inventory rate: 12.8% compared to 12.3% in May 2011
Number of properties that are 30 or more days past due, but not in foreclosure: (A) 4,285,000 compared to 4,187,000 in May 2011
Number of properties that are 90 or more days delinquent, but not in foreclosure: 1,906,000 compared to 1,921,000 in May 2011
Number of properties in foreclosure pre-sale inventory: (B) 2,167,000 compared to 2,164,000 in May 2011
Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) 6,452,000 compared to 6,350,000 in May 2011
States with highest percentage of non-current* loans: FL, NV, MS, NJ, IL (FL, NV, MS, NJ, IL in May 2011)
States with the lowest percentage of non-current* loans: MT, WY, AK, SD, ND (MT, WY, AK, SD, ND in May 2011)
*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
(1) Totals are extrapolated based on LPS Applied Analytics’ loan-level database of mortgage assets.
(2) All whole numbers are rounded to the nearest thousand.
Tags: LPS, mortgage delinquency rate, foreclosure inventory, non-current loans, Mortgage Monitor, foreclosure starts, foreclosure timelines