Tag Archives: Delinquency Rate

Home finance balances written off in the first quarter fell to a five-year low, according to Equifax's National Consumer Credit Trends report for March. The balance for home finance write-offs, which includes loans that completed the foreclosure process, transitioned into REO status, entered bankruptcy, or were charged off by the lender, decreased to $43.1 billion in the first quarter of this year. The balance represents a 22 percent decline from $55.4 billion in Q1 2012.

Mortgage default rates moved lower along with the overall national default rate in March, according to the Consumer Credit Default Indices released by S&P Dow Jones Indices and Experian. The first mortgage default rate fell to 1.41 percent last month from 1.48 percent in February and 1.88 percent from March 2012. The second mortgage default rate was down to 0.69 percent, a monthly and yearly decrease from 0.71 percent and 1.03 percent, respectively.

Lender Processing Services (LPS) reported a spike in cure rates in February. About 500,000 loans were cured, or went from being delinquent to current, in February, with most of the cures reported on loans that were just one or two months past due, according to LPS' February Mortgage Monitor report. LPS also found an increase in modifications over the last two quarters after two years of decreases.

According to a FICO survey, 71 percent of bankers polled believe home prices are ""rising at a sustainable pace"" in the context of mortgage lending risk. On the credit health side, 39 percent of respondents expect mortgage delinquencies to fall over the next six months, while another 45 percent expect delinquencies to remain flat. Sixteen percent anticipate an increase in delinquencies, making this first-quarter survey the most optimistic since the surveys started.

Servicers continue to make strides in home retention efforts, completing more than 360,000 retention actions in the fourth quarter of 2012. However, Fitch Ratings detects continued weak asset quality trends, especially among loans modified from 2008 through 2010. In fact, Fitch's findings lead the agency to fortify its belief that troubled debt restructurings should be counted as nonperforming assets. ""[W]e regard the high delinquency and foreclosure rates for recently modified mortgages as reflective of still elevated residential mortgage asset quality problems,"" Fitch said.

Since the housing crisis, many large banks have sold off servicing portfolios to smaller, emerging companies. According to a recent study, these portfolios often begin to perform better after the transfers. Opera Solutions found faster liquidations and better long-term performance for modified loans after portfolios were sold. According to the study, two servicers stand out for acquiring the ""lion's share"" of servicing rights--Ocwen and Nationstar. At Ocwen, which acquired the most loans, the study detected higher levels of foreclosures and REO rates immediately following acquisitions. However, after a period of months, Ocwen's portfolios stabilized and improved.

Fannie Mae earned a quarterly net income of $7.6 billion in Q4 and an annual net income of $17.2 billion throughout 2012. Both figures represent the largest quarterly and annual net incomes in the company's history. Fannie Mae credited last year's growth to improved credit results driven by a decline in serious delinquency rates, an increase in home prices, and higher sales prices on Fannie Mae-owned properties. For the full year, Fannie Mae paid $11.6 billion in dividends to Treasury under the senior preferred stock purchase agreement between the two organizations.

Fannie Mae and Freddie Mac continue to administer foreclosure prevention efforts while experiencing declines in delinquencies, foreclosures, and REO inventories, according to a report from the Federal Housing Finance Agency (FHFA). The GSEs enacted 541,219 foreclosure prevention actions in 2012, contributing to a total of 2.7 million foreclosure prevention efforts since the enterprises came under government conservatorship in 2008, according to the report. Over the year, delinquencies also fell by a substantial 14 percent with the FHFA reporting declines in every state except New Jersey and New York.

The mortgaged delinquency rate in February slipped below 7 percent, according data from Lender Processing Services, Inc. (LPS). On Tuesday, LPS provided an early look at month-end mortgage performance data for February and found the delinquency rate is at 6.80 percent, down 3.16 percent from January's 7.03 percent and a decrease of 6.51 percent from February 2012. At the same time, the foreclosure pre-sale inventory rate averaged 3.38 percent, which represents a 0.98 percent month-over-month decline and a 19.58 percent decrease year-over-year.

In January, the number of homes still hidden in the shadows fell to 2.2 million, a 28 percent decrease from the January 2010 peak when an estimated three million housing units were in shadow inventory, data from CoreLogic revealed. The 2.2 million units represent a supply of nine months and a year-over-year decline of 18 percent from January 2012, CoreLogic reported. Seriously delinquent loans were the main drivers of shadow inventory, accounting for one million of the distressed properties yet to be released.