Mortgage Delinquencies Down Nearly 25 Percent since Market Peak

January 9, 2012 (Shirley Allen)

Mortgage delinquencies jumped back up in November after three months of declines but were still nearly 25 percent below the January 2010 peak according to the November Mortgage Monitor Report released by Lender Processing Services (LPS).

The total number of loans that are 30 days or more past due, but not yet in foreclosure, increased from 7.93 percent in October to 8.15 percent in November, an increase of 2.7 percent. Despite the increase, the delinquency rate in November was still 9.6 percent lower than what it was in November 2010.

The number of properties reaching the foreclosure stage declined in November to a total of 2.116 million, down from 2.210 million properties in October, a decline of 94,000 properties, while the number of properties entering the shadow inventory grew, increasing from 1.759 million properties in October to 1.809 million properties in November, an increase of 50,000 properties.

The percentage of homes that have remained in the foreclosure inventory for 24 months or more reached an all-time high of 42 percent in November.

The total number of properties that were either delinquent or in foreclosure declined from 6.298 million in October to 6.260 million in November, a decline of 0.6 percent.

New and repeat foreclosure starts dropped sharply in November, down nearly 30 percent from the previous month, but the drop is believed to be more a result of ongoing document reviews, additional state legislation and new regulatory requirements rather than a shift in trend as the number of late-stage delinquencies in the pipeline have remained relatively consistent. Even with the decline, foreclosure starts in November still outnumbered foreclosure sales by almost two-to-one.

The two Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, accounted for the largest drop in foreclosure starts.

November’s data continues to show significant differences in foreclosure timelines between states that use the judicial foreclosure process and states that use the non-judicial foreclosure process with judicial states taking an average of nearly three times longer to process foreclosures than non-judicial states. Foreclosure sale rates in non-judicial states have been proceeding at nearly four times that of judicial states.

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 7.93% in October 2011

Month-over-month change in delinquency rate: 2.7% compared to -2.0% in October 2011

Year-over-year change in delinquency rate: -9.6% compared to -14.6% in October 2011

Total U.S foreclosure pre-sale inventory rate: 4.16% compared to 4.29% in October 2011

Month-over-month change in foreclosure presale inventory rate: -3.0% compared to 2.5% in October 2011

Year-over-year change in foreclosure presale inventory rate: 2.0% compared to 9.4% in October 2011

Number of properties that are 30 or more days past due, but not in foreclosure: (A) 4,144,000 compared to 4,088,000 in October 2011

Number of properties that are 90 or more days delinquent, but not in foreclosure: 1,809,000 compared to 1,759,000 in October 2011

Number of properties in foreclosure pre-sale inventory: (B) 2,116,000 compared to 2,210,000 in October 2011

Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) 6,260,000 compared to 6,298,000 in October 2011

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

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