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Tag Archives: Delinquency Rate

Outstanding Mortgage Balances Declined $30B Each Month in 2011

Each month of 2011, outstanding mortgage balances in the U.S. declined by an average of $30 billion, according to a recently released report from Moody's Analytics and Equifax. The report attributes the decline to defaulted loans being written off. Aggregate delinquency rose by 6 basis points in December to 6.12 percent, according to the companies' joint study. The rate remains in line with rates seen since April but has declined since a January high of 8.25 percent.

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Processing Delays Manifested: 39% Fewer Foreclosure Starts in 2011

The number of foreclosure actions initiated in 2011 was down 38.7 percent compared to 2010, according to a new report from Lender Processing Services (LPS). The foreclosure inventory, on the other hand, remains near historic highs, at 4.11 percent. The numbers illustrate the impact of processing delays brought on by the robo-signing controversy, the impact of which remains strong in judicial states. LPS says half of all loans in foreclosure in judicial states have not made a payment in more than two years compared to 28 percent in non-judicial states.

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FHA Steps Up Lender Requirements to Limit Default Risk

The Federal Housing Administration (FHA) has announced new measures to strengthen standards for the lenders it works with - measures the agency says will help it better manage the risk that comes with insuring mortgages against default. The new regulations raise the bar in terms of lender performance when it comes to seriously delinquent and claim rates, and shores up the agency's processes for requiring lenders to cover losses from insurance claims paid on mortgages that involve fraud or don't meet FHA's underwriting guidelines.

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Moody’s: U.S. CMBS Loan Delinquencies Rise to 9.32%

The delinquency rate on loans included in commercial mortgage-backed securities (CMBS) transactions increased by five basis points in December to 9.32 percent, according to Moody's Investors Service. At the same time, the rate of loans in special servicing declined by 13 basis points. December was the 12th consecutive month that CMBS delinquencies have been above 9 percent, by Moody's assessment. Bank of America Plaza in Atlanta, Georgia, with an outstanding balance of $363 million, was the largest newly delinquent loan in December.

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Delinquency and Foreclosure Rates Down From a Year Ago: LPS

As of the end of December, Lender Processing Services (LPS) counted 6,167,000 borrowers behind on their mortgage payments, including those already in the process of foreclosure. That tally is the culmination of a steady decline over the last year, with both the national delinquency rate and foreclosure rate down when compared to their December 2010 readings. Delinquencies dropped by 7.7 percent from their year-ago level, while foreclosures declined by 1.0 percent.

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BofA Reports Improvement in Net Income, Decline in Servicing Portfolio

After a net loss of $2.2 billion in 2010, Bank of America reported net income of $1.4 billion, $0.01 per diluted share, for the year in 2011, according to the company's earnings report released Thursday. On a fully taxable-equivalent basis, net interest expense declined 15 percent for the year arriving at $94.4 billion. BofA's mortgage servicing portfolio is on the decline. The $1.8 trillion portfolio reported at the end of the year is down from $1.9 trillion in the previous quarter and $2.1 trillion a year ago.

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Citi’s $1.2B Fourth-Quarter Profit Misses Market Forecasts

Citigroup's fourth-quarter results fell far short of analysts' expectations, despite a 40 percent drop in credit losses from the previous year. The company reported net income of $1.2 billion, or 38 cents per share, for the fourth quarter of 2011. Analysts were looking for 50 cents per share. Company officials told investors that legacy mortgage issues are the single largest source of risk facing the U.S. banking industry. Citi saw loan buybacks go up 80 percent in 2011 as it stockpiled reserves for mortgage litigation costs.

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Wells Fargo Reports Record Income in Fourth Quarter

Wells Fargo & Company ended the year with record earnings in the fourth quarter, reporting a net income of $4.1 billion, up from $3.4 billion in the third quarter. The San Francisco-based bank reported year-end profits of $15.9 billion, demonstrating a 28 percent increase from yearly earnings in 2010. Wells Fargo holds a residential mortgage servicing portfolio totaling $1.8 trillion in value. As of year-end, the balance of loans 90-plus days delinquent stood at $22.4 billion.

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Biggest Risk for RMBS Investors? Strategic Defaults.

The performance of private-label residential mortgage-backed securities (RMBS) continues to face many challenges in 2012, with the biggest risk posed by strategic defaults, according to Moody's. The ratings agency says the performance of loan pools backing outstanding RMBS has begun to stabilize, with delinquency levels flat or even dropping as a result of modifications and re-default rates declining. It's the threat of strategic default, particularly in the prime jumbo sector, that has Moody's analysts worried.

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Loan Mods and Delinquencies Rise in November: HOPE NOW

The number of mortgage modifications completed during the month of November rose 5 percent from October, bringing the year-to-date total to about 969,000, according to data released Tuesday by HOPE NOW, a voluntary private sector alliance of mortgage industry participants. While completed modifications rose over the month, 60-plus day delinquencies also increased. After reporting 2.65 million 60-plus day delinquencies in October, HOPE NOW reported 2.77 million in November.

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