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LPS Finds Serious Delinquencies Outnumber Foreclosure Sales 50:1

There were 4,084,557 mortgages in the United States 90 or more days delinquent or in foreclosure as of the end of May, according to ""Lender Processing Services"":http://www.lpsvcs.com (LPS).

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With foreclosure sales at 78,676 at month end, the volume of seriously past due loans over-shadowed the number of completed foreclosures by 50 to 1, according to LPS' ""May Mortgage Monitor"":http://www.lpsvcs.com/LPSCorporateInformation/ResourceCenter/PressResources/MortgageMonitor/201105MortgageMonitor/LPSMortgageMonitorMay2011.pdf report released Wednesday.

In fact, the company says there are still significantly fewer foreclosure sales than there were before foreclosure moratoria were put into place last fall, and they're declining.

LPS' May data shows that the biggest drops in foreclosure sales have been seen along the East Coast. Since September 2010, foreclosure sales have declined 96 percent in Washington D.C., 80 percent in Maryland, 79 percent in New York, and 75 percent in New Jersey.

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Additionally, LPS’ analysis found that inventories of foreclosures in judicial states have increased twice as much as inventories in non-judicial states over the last year as courts have become clogged with high volumes of cases and lenders have slowed their processing of foreclosures, particularly in judicial areas muddled by affidavit issues.

Nationwide, the average time spent in foreclosure continues to extend, with more than 33 percent of borrowers in foreclosure not having made a payment in over two years, according to LPS latest study.

LPS says overall delinquencies are almost double and foreclosures are eight times higher than historical norms.

New problem loans though, defined as loans that were current six months ago and were 60 or more days delinquent at the end of May, are now less than half the peak levels seen in 2009, and are currently at 1.27 percent.

LPS says negative equity, however, remains a concern, with nearly 30 percent of current loans underwater.

The equity impact on new seriously delinquent loans is especially pronounced, with mortgages significantly underwater defaulting up to 10 times as much as loans with equity, according to LPS.

The company’s Mortgage Monitor Report is based on performance information from its loan-level database of nearly 40 million first liens across the spectrum of credit products.