The August Mortgage Monitor report released by Lender Processing Services Inc. (LPS) shows that foreclosure starts continue to accelerate with the government-sponsored enterprises (GSEs) displaying more aggressive timelines on early stage delinquencies. LPS data also shows refinance activity is picking up again as prepayment rates have been steadily increasing over the last two months and new originations hit 2010 highs.
As of the end of August, there had been more than two million foreclosure starts. While delinquencies during that same time period dropped 5.1 percent as compared to a year ago, in the context of "normal market conditions," delinquencies remain at historically high levels.
Breaking the trend of the last three months, agency foreclosure starts declined slightly in August; however, portfolio foreclosure starts have accelerated. Late stage delinquencies dominate these new foreclosure starts, though overall the percentage of seriously delinquent loans not in foreclosure is improving as compared to the extreme distress seen last year.
In January 2009, the percent of seriously delinquent loans that were current six months prior peaked at 2.92 percent; in August 2010 that rate was 1.65 percent. The report also shows that approximately 1.01 million loans that were current at the beginning of January are at least 60 days delinquent or in foreclosure as of the end of August, a month-over-month increase of 115,000 loans.
As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include:
►Total U.S. loan delinquency rate: 9.22 percent
►Total U.S. foreclosure inventory rate: 3.8 percent
►Total U.S. non-current* loan rate: 13.02 percent
►States with most non-current* loans: Florida, Nevada, Mississippi, Georgia and Illinois
►States with the fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming and Montana
*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.
LPS manages loan-level residential mortgage data and performance information on nearly 40 million loans across the spectrum of credit products. The company's research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for LPS' monthly Mortgage Monitor Report.
To review the full report, listen to a presentation of the report, access an executive summary or view a summary of the disclosures and definitions related to the survey, click here.
For more information, visit www.lpsvcs.com.