LPS: Judicial States See High Share of Aging Past Due Loans

A report from ""Lender Processing Services"":http://www.lpsvcs.com/Pages/default.aspx (LPS) revealed that in judicial states, the share of aging past due loans is significantly higher than in non-judicial states.

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In judicial states, nearly 60 percent of borrowers with loans in foreclosure have not made a payment in 2 years, whereas in non-judicial states, that percentage is at about 30 percent. Among those with loans 90 days or more past due, 50 percent of borrowers in judicial states have not made a payment in more than one year, compared to slightly more than 40 percent in non-judicial states.

The LPS report also found a surge in HARP refinance activity for those with higher loan-to-value ratios (LTVs) from January to June this year.

""Since the beginning of this year, high loan-to-value refinances have increased significantly. As an example, 2006 vintage GSE loans with six percent interest rates and LTV ratios between 100 and 125 percent increased from a 10 percent annualized prepayment rate at the end of 2011 to more than 40 percent in June 2012,"" said Herb Blecher, SVP at LPS Applied Analytics.

Blecher added that LPS data also shows this rise extends beyond that subsection and holds true for other vintages with the similar characteristics

Other data from LPS showed that the delinquency rate for June now stands at 7.14 percent, down 30 percent from the January 2010 peak when the rate was 10.57 percent. Month-over-month, the delinquency rate in June rose 3.4 percent, but was down 7.3 percent.

The rate of properties in foreclosure inventory maintained historically high levels at 4.09 percent for June; in December 2005, the rate was 0.44 percent.

Foreclosure starts totaled 173,556 in June, which down 20.7 percent from May and 20.5 percent year-over-year. Despite the decrease, foreclosure starts still outnumber foreclosure sales at a 2:1 ratio, according to LPS. Foreclosure sales numbered 74,000 in June.

For June, the states with highest percentage of non-current loans, which includes loans 30 days or more past due plus foreclosures, were Florida (21.2 percent), Mississippi (17 percent), Nevada (16 percent), New Jersey (16 percent), and Illinois (13.7 percent).

The states with the lowest percentage of non-current loans were Montana (5.5 percent), Alaska (5.1 percent), Wyoming (4.8 percent), South Dakota (4.8 percent), and North Dakota (3.6 percent).