Delinquencies Still Falling but Foreclosures at an All-Time High

Data released by ""Lender Processing Services"":http://www.lpsvcs.com (LPS) Thursday shows mortgage delinquencies are continuing to decline, now nearly 30 percent below their January 2010 peak.

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Loans in the process of foreclosure, on the other hand, are steadily rising. LPS says foreclosure inventories reached an all-time high at the end of October, making up 4.29 percent of all active mortgages.

The average days delinquent for loans in foreclosure extended as well during the month of October, setting a new record of 631 days since last payment, while the average days delinquent for loans 90 or more days past due but not yet in foreclosure decreased for the second consecutive month.

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LPS says judicial vs. non-judicial foreclosure processes remain a significant factor in the reduction of foreclosure pipelines from state to state, with foreclosure inventory percentages in non-judicial less than half that of their judicial counterparts.

This is largely a result of the fact that foreclosure sale rates in non-judicial states have been proceeding at four to five times that of judicial, LPS explained.

Non-judicial foreclosure states made up the entirety of the top 10 states with the largest year-over-year decline in non-current loans percentages. Arizona led the way with a 23.9 percent annual drop in non-current mortgages. California wasn’t far behind with a 20.2 percent decline, and in Nevada, non-current loans are down 19.1 percent from a year earlier.

LPS’ October data also showed that mortgage originations are on the rise, reaching levels not seen since mid-2010. Mortgage prepayment rates have also spiked, as much of the new origination is related to borrower refinancing. LPS says loans originated in 2009 and later are the primary drivers of the increase in refinances.

While origination activity for Federal Housing Administration (FHA) loans is down, GSE and FHA originations still account for the vast majority of all new loans - nearly nine out of every 10 new mortgages, according to LPS.