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Mortgage Delinquencies Continue to Decline as Foreclosure Inventories Climb
The latest Lender Processing Services Inc. (LPS) October Mortgage Monitor report shows that mortgage delinquencies have continued a steady decline, now nearly 30 percent off their January 2010 peak, while foreclosure inventories are on the rise, hitting an all-time high at the end of October of 4.29 percent of all active mortgages. The average days delinquent for loans in foreclosure extended as well, setting a new record of 631 days since last payment, while the average days delinquent for loans 90 or more days past due but not yet in foreclosure decreased for the second consecutive month.
Judicial versus non-judicial foreclosure processes remain a significant factor in the reduction of foreclosure pipelines from state to state, with non-judicial foreclosure inventory percentages less than half that of judicial states. This is largely a result of the fact that foreclosure sale rates in non-judicial states have been proceeding at four to five times that of judicial. Non-judicial foreclosure states made up the entirety of the top 10 states with the largest year-over-year decline in non-current loans percentages.
The October data also showed that mortgage originations are on the rise, reaching levels not seen since mid-2010. Mortgage pre-payment rates have also spiked, as much of the new origination is related to borrower refinancing; loans originated in 2009 and later are the primary drivers of the increase. While Federal Housing Administration (FHA) origination activity is down, government-sponsored enterprise (GSE) and FHA originations still account for the vast majority of all new loans—nearly nine out of every 10 new mortgages.
Highlights of the Mortgage Monitor report include:
►Total U.S. loan delinquency rate: 7.93 percent
►Month-over-month change in delinquency rate: -2.0 percent
►Total U.S. foreclosure pre-sale inventory rate: 4.29 percent
►Month-over-month change in foreclosure pre-sale inventory rate: 2.5 percent
►States with highest percentage of non-current loans: Florida, Mississippi, Nevada, New Jersey and Illinois
►States with the lowest percentage of non-current loans: North Dakota, Alaska, South Dakota, Wyoming and Montana
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