According to a new market report released by ""Lender Processing Services"":http://www.lpsvcs.com (LPS) Tuesday, delinquency rates are down across all first-lien home loan products, with an 18 percent overall decline since the start of 2010. The company's analysts attributed the drop to more loans entering foreclosure, combined with a decline in new delinquencies.
[IMAGE] As of the end of December, LPS reports the total U.S. delinquency rate for residential mortgage loans Ã¢â‚¬" which excludes loans that have been referred to an attorney for foreclosure Ã¢â‚¬" stood at 8.83 percent. That's down from a rate of 9.02 percent reported by the company just one month earlier. In January 2010, the overall delinquency rate stood at 10.97 percent.
The nation's foreclosure inventory, on the other hand, swelled almost 10 percent over the course of 2010. LPS classifies loans that have been referred to a foreclosure attorney up until the final stage of foreclosure sale (i.e. all loans in process) as part of the foreclosure inventory. This rate stood at 4.15 percent at the end of December, compared to 3.85 percent during the first month of last year.
Foreclosure inventories increased in December across all products except subprime. LPS says growth in the foreclosure count is being driven both by elevated levels of foreclosure starts as well as a very limited amount of foreclosure sale activity.
""LPS' latest analysis"":http://www.lpsvcs.com/NewsRoom/IndustryData/Documents/2010%20-%2012%20Mortgage%20Monitor/LPSMortgageMonitorDecember2010.pdf shows that 259,518 foreclosures were started during the month of December. Thirty percent of these are considered ""repeat foreclosures,"" meaning they have been in foreclosure previously.
The company says GSE foreclosure starts increased slightly in December after four months of decline. Foreclosure starts on loans held in lender portfolios increased ""significantly,"" LPS said. But foreclosures initiated on loans owned by private mortgage investors dropped sharply.
Combining loans that are delinquent and those in foreclosure, LPS says 12.98 percent of the nation's outstanding mortgages are classified as non-current.
According to LPS' calculations, 6,869,584 first lien mortgages weren't current at the end of last year.
Of these, 2,195,940 are already in the process of foreclosure and 2,117,845 are considered seriously delinquent, which means they have been past due for longer than 90 days but foreclosure has not been initiated. Thirty-four percent of seriously delinquent borrowers have not made a payment in over a year.
To put the numbers into perspective, LPS says delinquencies have dropped to about 2 times the historical average, while foreclosure inventories are 7.8 times higher and continue to rise.