The April Mortgage Monitor report released by Lender Processing Services Inc. (LPS) shows that while overall foreclosure starts were down 2.6 percent in April, FHA foreclosure starts spiked significantly, jumping 73 percent during the month. The rise was driven primarily by defaults in 2008 and 2009 vintage loans, though all FHA vintages saw increases in foreclosure starts in April, despite that fact that the more recent vintage—from 2009 forward—have shown improved relative credit performance.
"In 2008, when the loan origination market virtually dried up, the FHA stepped in to fill the void," said Herb Blecher, senior vice president for LPS Applied Analytics. "FHA originations tripled that year, and increased to five times historical averages in 2009. High volumes like that, even with low default rates, can produce larger numbers of foreclosure starts. That represents a lot of loans to work through—the 2008 vintage alone represents some $14 billion of unpaid balances in foreclosure, and the overall FHA foreclosure inventory continues to rise."
The April data also showed that foreclosure sales continue to remain low nationally, decreasing 2.6 percent month-over-month, and with volume that remains about one-third that of foreclosure starts. Foreclosure sales in non-judicial states dropped 2.0 percent, and those in judicial states remained basically flat, down just 0.01 percent over the month. Even those states that saw increases in foreclosure sales saw only incremental increases in terms of real numbers, and all were still far below pre-moratoria levels.
As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include:
►Total U.S. loan delinquency rate: 7.12 %
►Month-over-month change in delinquency rate: 0.4 %
►Total U.S. foreclosure pre-sale inventory rate: 4.14 %
►Month-over-month change in foreclosure pre-sale inventory rate: 0.0 %
►States with highest percentage of non-current loans: Florida, Mississippi, New Jersey, Nevada and Illinois
►States with the lowest percentage of non-current loans: Montana, Alaska, South Dakota, Wyoming and North Dakota