Delay In Foreclosure Sales Causing Major Backlog

The number of loans moving to seriously delinquent status beyond 90 days far outpaced the number of foreclosure starts last month, Lender Processing Services Inc. (LPS) reports in its November Mortgage Monitor report. Nearly 2.2 million loans were 90 days or more delinquent but not yet in foreclosure.

LPS says the volume of loans moving to real estate owned continued to drop as moratoria further delayed foreclosure sales.

Foreclosure inventories also continued to rise for the fifth straight month as delinquent accounts were referred for foreclosure, but the sale of foreclosure properties continued to decline. When compared to January 2008 levels, the foreclosure inventory of jumbo prime loans is nearly seven times higher; the inventory of agency prime loans is nearly six times higher; and the foreclosure inventory of option adjustable-rate mortgages is approaching five times the inventory in January 2008.

The report also shows that one-third of loans that are 90 days or more delinquent have not made a payment in a year; however, the number of new problem loans declined nearly 5.4% from October, which is opposite of the seasonality trend that typically impacts new
delinquencies this time of year. Self-cures for loans one to two months delinquent increased in November to a six-month high.



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