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Report: Delinquencies Lowest in 12 Months

Jacksonville, Florida's ""Lender Processing Services"":http://www.lpsvcs.com (LPS), Inc. released its latest ""LPS Mortgage Monitor"":http://www.lpsvcs.com/NEWSROOM/INDUSTRYDATA/Pages/default.aspx this week, which provides mortgage industry performance indicators as of March month-end. Among the findings, LPS reported that the number of newly delinquent loans declined in March to 7.88 percent of outstanding mortgages, a month-over-month decrease of 5.8 percent.
In fact, the company said new delinquencies fell to their lowest level of the last 12 months. However, LPS noted that the month-over-month March decline in delinquencies is about half as much as the average in the same timeframe from 2002-2007 (5.8 percent vs. 14 percent).
On the other end of the spectrum, foreclosure inventories experienced the highest monthly increase in nearly three years, LPS reported. The company said March's foreclosure rate of 2.52 percent, reflects a month-over-month increase of 12.8 percent and a year-over-year increase of 87.8 percent.
Based on LPS' analysis, the total percent of non-current loans (including delinquencies and foreclosures) is now at 10.39 percent. The company said this represents a month-over-month decrease in non-current loans of 1.9 percent, but a year-over-year increase of 54 percent.
Foreclosure starts in March hit new all-time highs across every major product category in LPS' study. The largest 12-month increase was seen in jumbo loans at 221 percent; non-agency conforming loans at 158 percent; and agency prime loans at 144 percent.
LPS said foreclosure starts on portfolio loans spiked significantly in March, and agency-owned mortgages continued to rise, as well. Ginnie Mae was the only investor category to remain stable for the month, LPS said. The company noted that foreclosure sales dropped significantly in March, due in large part to the reinstatement of the GSEs' moratorium on February 13th and continuing through the end of March.
LPS noted that since 2005, jumbo prime, option adjustable-rate mortgages (ARMs), and conforming prime loans have experienced the highest rates of deterioration.
The company also pointed out that underwriting criteria has tightened since the onset of the housing crisis. The weighted average credit score of newly originated loans increased throughout 2008 for all investors, LPS said, with the exception of portfolio loans (or bank-owned). LPS also said that the percentage of Federal Housing Administration (FHA) loans with credit scores of less than 660 dropped from almost 60 percent in January 2008 to 40 percent in December 2008.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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