Delinquencies and foreclosures are continuing to decline with higher concentrations among Alt-A and subprime loans, according to the latest Mortgage Market Monitor from ""Lender Processing Services (LPS)."":http://www.lpsvcs.com/Pages/default.aspx[IMAGE]
Foreclosures are down 31 percent year-over-year in July, while delinquencies are down 9 percent, according to LPS data.
Both delinquencies and foreclosures declined over the 12-month period among all types of loans, except Alt-A and subprime loans.
Delinquencies rose 1 percent among Alt A loans and 3 percent among subprime loans.
In fact, more than one-third of current delinquencies are made up of these two loan categories.
LPS reported foreclosure starts year-to-date as of the end of July are their lowest since 2007, and ""[g]iven that nearly 50[COLUMN_BREAK]
percent of these are repeat foreclosures means that the picture is even more positive than a surface reading of the numbers might suggest,"" said Herb Blecher, SVP of data and analytics at LPS.
Distressed sales are also making up a diminishing share of home sales nationwide, according to LPS. For the first half of this year, distressed sales made up 10 percent of home sales, down from 16 percent over the first half of last year.
The percentage of noncurrent loans--both delinquencies and foreclosures--continues to remain highest in judicial states. Seven of the top 10 noncurrent rates are in judicial states, with Florida topping the list.
However, Mississippi--a nonjudicial state Ã¢â‚¬" took the No. 2 spot this month.
The other two nonjudicial states in the top 10 were Nevada and Rhode Island, which claimed the sixth and seventh spots on the list.
Nationally, 9.2 percent of mortgage loans are noncurrent, which is a 16.9 percent decline from last year.
LPS also highlighted prepayment trends among the rising interest rate environment in its report.
""[E]ven with that increasing interest rate pressure, July's monthly prepayment rates are still about where they were this time last year, when rates were at historic lows,"" Belcher said.
""In fact, they are roughly at the same levels as the heights of the Ã¢â‚¬Ëœmini refinance booms' in 2010,"" he said.
However, ""as interest rates continue to climb, we can expect that both prepayments and associated originations will decline,"" he added.