February 9, 2011 (Shirley Allen)
Lender Processing Services (LPS) released its December Mortgage Monitor report and disclosed that foreclosure activity continues to climb but new foreclosure proceedings declined slightly. Incredibly, nearly 6.9 million homes are now in some stage of delinquency or foreclosure, with foreclosures being 7.8 times historical averages and the total number of delinquent loans nearly twice as high as historical averages.

The number of newly delinquent loans declined during 2010, helping push overall delinquent inventories down 18 percent for the year. The volume of loans moving to real estate-owned (REO) remains extremely low as moratoria and process reviews continue, further pressuring foreclosure inventories which subsequently has now risen for the sixth consecutive month.

Just over 2.1 million loans are 90 days or more delinquent but not yet in foreclosure which will further add to the foreclosure inventory, meanwhile, the 90-days plus delinquency category has declined, the number of loans moving to seriously delinquent status beyond 90 days still far outpaced the number of foreclosure starts.

The report also shows that over one-third of borrowers with loans that are 90 days or more delinquent have not made a payment in over a year. Self-cures for loans one-to-two months delinquent declined slightly in December, and late-stage cures, usually related to modification activity, continue to decline. In December, 259,518 loans were referred to foreclosure, which represents a 0.6 percent month-over-month decline.

As reported earlier in LPS’ First Look release and included in LPS’ latest Mortgage Monitor report:

Total U.S. loan delinquency rate: 8.83 percent
Total U.S. foreclosure inventory rate: 4.15 percent
Total U.S. non-current* loan rate: 12.98 percent
States with most non-current* loans: Florida, Nevada, Mississippi, Georgia, New Jersey
States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Montana

Mortgage loan origination activity continues to increase with new production in November reaching 2010 highs. While FHA originations have declined, the share of agency loans increased, and 95 percent of all new issuance remains government supported.

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Note: Totals based on LPS Applied Analytics’ loan-level database of mortgage assets and are extrapolated to represent the industry

Tags: lps, foreclosures, delinquent loans, historical averages, reo, foreclosure inventory, borrowers, mortgage loan origination, fha