August 14, 2012 (Shirley Allen)

Mortgage delinquencies increased for the third consecutive month in June, rising 3.4 percent from May, but were still seven percent lower than last year according to the latest Mortgage Monitor Report released by Lender Processing Services (LPS).

The percentage of loans that were 30 days or more past due, but not yet in foreclosure, increased to 7.14 percent in June from 6.91 percent in May, the third consecutive month that the delinquency rate has increased following nine months of declines. The delinquency rate was still 7.3 percent lower than what it was in June 2011 when the delinquency rate stood at 7.71 percent.

However, seriously delinquent loans, those that are 90 days or more past due, fell for the sixth consecutive month to 7.24 percent from 7.28 percent in May.

Foreclosure starts fell by 20.7 percent from May to June, with 173,556 starts reported compared to 218,909 in May, the lowest amount of new foreclosure starts since 2008. A year ago there were 218,423 foreclosure starts.

The foreclosure inventory decreased 2.0 percent in June to a total of 2.061 million properties. The foreclosure inventory was 1.0 percent lower than a year ago, but at the current rate of 4.09 percent, remains near all-time highs.

In states that utilize the judicial foreclosure process, 6.4 percent of all loans were somewhere in the foreclosure pipeline compared to 2.4 percent in non-judicial states.

Nearly 60 percent of the homes in foreclosure in states that use the judicial process haven’t made a payment in two years or more, while in non-judicial states it’s about half of that amount. Regardless of the type of foreclosure process a state uses, the number of homeowners who haven’t made a payment in two years or more continues to climb.

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): 7.20% compared to 6.19% in May 2012

Month-over-month change in delinquency rate: 3.4%

Year-over-year change in delinquency rate: -7.3%

Total U.S foreclosure pre-sale inventory rate: 4.09%

Month-over-month change in foreclosure presale inventory rate: -2.0%

Year-over-year change in foreclosure presale inventory rate: -1.0%

Number of properties that are 30 or more days past due, but not in foreclosure: (A) 3,602,000

Number of properties that are 90 or more days delinquent, but not in foreclosure: 1,590,000

Number of properties in foreclosure pre-sale inventory: (B) 2,061,000 compared to

Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) 5,663,000

States with highest percentage of non-current* loans: FL, MS, NV, NJ, IL (FL, MS, NJ, NV, IL in May 2012)

States with the lowest percentage of non-current* loans: MT, AK, WY, SD, ND (MT, AK, SD, WY, ND in May 2012)

*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