Foreclosure Delinquency Timelines Hit Record Lengths

August 31, 2011 (Shirley Allen)

Foreclosure timelines got even longer in July with the average loan in foreclosure now being delinquent for a record 599 days, up from 587 days in June according to the July Mortgage Monitor Report by Lender Processing Services (LPS).

Forty-two percent of the 1.9 million loans that were 90+ days delinquent, but not yet in foreclosure, have not had a payment made on them in more than a year with the average delinquency now at a record 397 days.

Foreclosure starts outnumbered foreclosure sales by almost three to one, even with the number of first time foreclosures starts at three year lows. The foreclosure process remains bogged down and tediously slow, especially in states that use the judicial foreclosure process. The foreclosure process in judicial states takes an average of three times longer to complete than in non-judicial states.

On average, judicial states would require 111 months to work through their inventories of 90 days or more delinquent or in foreclosure loans compared to approximately 32 months for non-judicial states.

The total number of loans that are 30 days or more past due, but not yet in foreclosure, climbed from 8.15 percent in June to 8.34 percent in July, a gain of 2.4, however, compared to July of 2010, the delinquency rate continued to be significantly less, with a year-over-year decline of 10.4 percent.

Mortgage delinquency rates increased by 2.4 percent in July. It was the second consecutive month that the mortgage delinquency rate has shown an increase adding an additional 195,000 delinquent mortgages since the beginning of June, an increase of 4.7 percent.

The number of properties in foreclosure decreased 0.4 percent from 2,167,000 in June to 2,156,000 in July.

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): 8.34% compared to 8.15% in June 2011

Month-over-month change in delinquency rate: 2.4% compared to 2.4% in June 2011

Year-over-year change in delinquency rate: -10.4% compared to -14.7% in June 2011

Total U.S foreclosure pre-sale inventory rate: 4.11% compared to 4.12% in June 2011

Month-over-month change in foreclosure presale inventory rate: -0.4% compared to 0.2% in June 2011

Year-over-year change in foreclosure presale inventory rate: 9.7% compared to 12.8% in June 2011

Number of properties that are 30 or more days past due, but not in foreclosure: (A) 4,382,000 compared to 4,285,000 in June 2011

Number of properties that are 90 or more days delinquent, but not in foreclosure: 1,899,000 compared to 1,906,000 in June 2011

Number of properties in foreclosure pre-sale inventory: (B) 2,156,000 compared to 2,167,000 in June 2011

Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) 6,538,000 compared to 6,452,000 in June 2011

States with highest percentage of non-current* loans: FL, NV, MS, NJ, IL (FL, NV, MS, NJ, IL in June 2011)

States with the lowest percentage of non-current* loans: MT, WY, AK, SD, ND (MT, WY, AK, SD, ND in June 2011)

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.

Notes:
(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

Source:
LPS