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Tag Archives: Delinquency Rate

Risks of Eminent Domain in California: Fitch

In a commentary, Fitch stated the proposed uses of eminent domain in California could negatively affect private label RMBS performance. Recently, the board of supervisors of San Bernardino County voted to form a joint powers authority with California cities Fontana and Ontario to look into the option of using eminent domain to seize underwater mortgages. Fitch said one proposal, which is of particular concern, indicates that only current and delinquent mortgages, not those in foreclosure, would be eligible. Thus, borrowers who would have stayed current on their payments could have their mortgage seized by the local, state, or county government. If eminent domain was to be used in such a way, then holders of the seized homes could experience losses, Fitch said.

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May Foreclosure Starts Nearly Triple Sales: LPS

In May, foreclosure starts outnumbered foreclosure sales by a near 3-1 ratio, according to report from Lender Processing Services (LPS). Even though foreclosure starts and sales saw similar monthly increases, the actual number of foreclosure starts was significantly higher, with starts numbering 202,707 while foreclosure sales totaled 73,439. Also, foreclosure inventory maintained historically high levels at 4.14 percent. LPS Applied Analytics SVP Herb Blecher said the situation is more nuanced when looking at the breakdown between states that apply judicial versus non-judicial foreclosure processes.

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HELOC Delinquency Rate Up, All Other Categories Down: ABA

Out of 11 categories of loan types, only home equity lines of credit (HELOC) rose, according to a report from the American Bankers Association (ABA). The report showed that for the first quarter of 2012, the delinquency rate for open-end home equity lines of credit rose from 1.69 percent to 1.78 percent. Open-end loans are those with a fixed amount of available credit but a balance that changes based on usage. ABA Chief Economist James Chessen attributed the increase to the painful adjustment still underway in the housing sector.

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Trepp Reports CMBS Delinquencies Hit All-Time High

The delinquency rate for commercial mortgage-backed securities (CMBS) moved up 12 basis points in June to 10.16 percent, reaching an all-time high, according to a report from Trepp. The delinquency rate includes loans 30 days delinquent or in foreclosure. In May, the rate surpassed 10 percent at 10.04 percent. A year ago, the delinquency rate was 9.37 percent and prior to breaking through the 10 percent barrier, the delinquency rate was 9.80 percent in April. Trepp cited weak performance among lodging, office and retail loans as reasons for the rise in the delinquency rate.

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GAO: Foreclosure Mitigation Efforts Need Improvement

With high foreclosure rates still presenting a major hurdle to housing and economic recovery, GAO conducted a study to evaluate and find opportunities to enhance foreclosure mitigation efforts. The report asserts that government agencies participating in foreclosure mitigation programs need improve their existing strategies to help borrowers. The report specifically addressed loans modified by the Treasury (through HAMP), the United States Department of Agriculture (USDA), FHA, and the GSEs.

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Foreclosures Remain High but Improving Yearly: CoreLogic

The number of completed foreclosures in May decreased yearly and increase slightly from the previous month, CoreLogic reported Friday. The number of completed foreclosures last month totaled 63,000 compared to 77,000 in May 2011 and 62,000 in April 2012. Since the financial crisis began in September 2008, 3.6 million homes have been lost to foreclosure. May also saw a yearly drop in the number of homes sitting in foreclosure inventory with about 1.4 million homes, or 3.4 percent, in foreclosure compared to 1.5 million, or 3.5 percent a year ago.

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First Mortgage Delinquencies on Decline

While still elevated compared to historic levels, severely delinquent balances among first mortgages are on the decline, according to Equifax's May National Consumer Credit Trends Report. The May 2012 total of delinquent balances represented $450 billion, a 37 percent decline from the peak of more than $700 billion in January 2010. The biggest drop was seen in severely delinquent (90-plus days) non-agency first mortgage loans, which fell 45 percent to $320 billion in May from its peak of $580 billion in January 2010.

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Modified Borrowers Less Risky than Non-Modified: TransUnion

If a lender had to choose between a consumer with a modified mortgage or a consumer who defaulted but did not get modified, turns out, the lender should go with the modified borrower. According to a new TransUnion study, those who received a modification did better with maintaining payments on loans opened after their initial delinquency than those who did not get modified. The study looked at modified and non-modified delinquent borrowers who opened up auto loans and car loans after their initial delinquency.

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Delinquency Rate Increases Again, Overdue Mortgages=5,569,000: LPS

Lender Processing Services, Inc. (LPS) offered a peak into mortgage performance in May 2012 and revealed a slight increase in the delinquency rate. The total delinquency rate, which includes all loans 30 days or more past due but not yet in foreclosure, was 7.20 percent, a 1.1 percent increase from the month before in April. Compared to May 2011, the delinquency rate is still down significantly by 9.6 percent. In April 2012, the delinquency rate increased slightly by 0.4 percent from the month before after 9 months of declines.

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