The February Mortgage Monitor report released by Lender Processing Services Inc. (LPS) shows that while delinquencies continue to decline, an enormous backlog of foreclosures still exists with overhang at every level. As of the end of February, foreclosure inventory levels stand at more than 30 times monthly foreclosure sales volume, indicating this backlog will continue for quite some time. Ultimately, these foreclosures will most likely reenter the market as real estate-owned (REO) properties, putting even more downward pressure on U.S. home values. Click here to view the full LPS February Mortgage Monitor Report. February's data also showed a 23 percent increase in option adjustable-rate mortgage (ARM) foreclosures over the last six months, far more than any other product type. In terms of absolute numbers, option ARM foreclosures stand at 18.8 percent, a higher level than sub-prime foreclosures ever reached. In addition, deterioration continues in the non-agency prime segment. Both jumbo and conforming non-agency prime loans showed increases in foreclosures and were the only product areas with increases in delinquencies. The LPS data also showed that banks' loan modification efforts have begun to pay off, as 22 percent of loans that were 90-plus days delinquent 12 months ago are now current. Timelines continue to extend, with the average U.S. loan in foreclosure now having been delinquent for a record 537 days, and a full 30 percent of loans in foreclosure have not made a payment in over two years. As reported in the LPS February First Look release, other key results from LPS' latest Mortgage Monitor report include: ►Total U.S. loan delinquency rate: 8.8 percent ►Total U.S. foreclosure inventory rate: 4.15 percent ►Total U.S. non-current inventory: 6,856,000 ►States with most non-current* loans: Florida, Nevada, Mississippi, New Jersey, Georgia ►States with fewest non-current* loans: Montana, Wyoming, Alaska, South Dakota, North Dakota *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. Totals based on LPS Applied Analytics' loan-level database of mortgage assets and are extrapolated to represent the industry.