May 31, 2011 (Jeff Alan)
The number of foreclosures initiated by mortgage servicers declined in April 2011 to levels not seen since 2008 according to the Lender Processing Services (LPS) Mortgage Monitor report. With the exception of last month, March 2011, foreclosure activity has declined every month since mortgage servicers have slowed the pace of defaults due to the “robo-signing” controversy. Meanwhile, foreclosure inventories remain near all-time highs.
Mortgage servicers initiated 187,000 foreclosures in April which was a 31 percent drop from March and a 15 percent reduction from April of 2010, but the amount of time that it took a home to foreclose continued to increase. From the time a home became delinquent until it completed foreclosure, a whopping 567 days had passed according to April’s report. That was up from 548 days in March.
The biggest lag time in the foreclosure process was generally in states that utilize a judicial foreclosure system. Washington D.C. experienced a 91 percent decrease in the number of foreclosure sales just since September 2010. New York saw a 79 percent decline in foreclosure sales since the same time period.
Delinquencies increased slightly in April compared to March, but are still down almost 10 percent from March of 2010 and over 25 percent from January of 2010.
Forty percent of all borrowers who are over 90 days delinquent have not made a payment in over a year, but new seriously delinquent loan rates have improved as rates have dropped to three year lows.
The number of foreclosure starts continues to outnumber the number of foreclosure sales by over 2 to 1. The 90 day plus foreclosure inventory now stands at 4,211,688. However, an increase in early stage cures helped reduce overall inventory slightly as the total outflow (sales/cures) exceeded total inflow (starts).
Additional information previously released on LPS’ “First Look” report:
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 7.97% compared to 7.78% in March 2011
Month-over-month change in delinquency rate: 2.4% compared to -11.6% in March 2011
Year-over-year change in delinquency rate: -16.3% compared to -19.4% in March 2011
Total U.S foreclosure pre-sale inventory rate: 4.14% compared to 4.21% in March 2011
Month-over-month change in foreclosure presale inventory rate: -1.6% compared to 1.4% in March 2011
Year-over-year change in foreclosure presale inventory rate: 12.7% compared to 11.0% in March 2011
Number of properties that are 30 or more days past due, but not in foreclosure: (A) 4,204,000 compared to 4,111,000 in March 2011
Number of properties that are 90 or more days delinquent, but not in foreclosure: 1,961,000 compared to 1,989,000 in March 2011
Number of properties in foreclosure pre-sale inventory: (B) 2,184,000 compared to 2,222,000 in March 2011
Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) 6,388,000 compared to 6,333,000 in March 2011
States with highest percentage of non-current* loans: FL, NV, MS, NJ, GA (FL, NV, MS, NJ, GA in March 2011)
States with the lowest percentage of non-current* loans: MT, WY, AK, SD, ND (MT, WY, AK, SD, ND in February 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