The November Mortgage Monitor Report released by Lender Processing Services Inc. (LPS) shows that while mortgage delinquencies at the end of November 2011 were nearly 25 percent less than the January 2010 peak, the trend toward fewer loans becoming delinquent, which dominated 2010 and the first quarter of 2011, appears to have halted. At the same time, new problem loans—those loans seriously delinquent as of the end of November that were current six months prior—have not improved significantly in the last year. This degree of stagnation indicates that while the situation is not getting markedly worse, it is not improving either, and inventories of troubled loans remain significantly higher than pre-crisis levels across the board.
The November mortgage performance data also showed both new and repeat foreclosure starts dropped sharply in November, down nearly 30 percent from the month prior. As late-stage delinquencies in the pipeline still number close to two million, the sharp drop is more indicative of the impact of ongoing document reviews, additional state legislation and new regulatory requirements rather than a shift in trend.
Prepayment activity, a primary indicator of refinances, remained strong after several consecutive months of growth; however, the October origination data showed a month-over-month drop of nearly 12 percent. While still the second highest level for the year, originations through October 2011 were down 21 percent versus the same period in 2010 and down almost 30 percent versus 2009.
As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include:
►Total U.S. loan delinquency rate: 8.15 percent
►Month-over-month change in delinquency rate: 2.7 percent
►Total U.S. foreclosure pre-sale inventory rate: 4.16 percent
►Month-over-month change in foreclosure pre-sale inventory rate: Three 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, Wyoming, South Dakota and Montana
