LPS: Foreclosure Inventory Near All-Time High

11941_foreclosedhouse4 LPS: Foreclosure Inventory Near All-Time High The nation's foreclosure inventory remains near an all-time high, with 4.12% of all active mortgages in the foreclosure pipeline, in addition to the 3.2% that are 90 days or more delinquent but have not yet begun the foreclosure process, according to new data from Jacksonville, Fla.-based Lender Processing Services (LPS).

According to LPS Applied Analytics Senior Vice President Herb Blecher, the situation is more nuanced when looking at the breakdown between states that apply judicial versus nonjudicial foreclosure processes.

‘There's a stark contrast in foreclosure inventories between judicial and nonjudicial states,’ Blecher says. ‘In the former, 6.5 percent of all loans are in some stage of foreclosure – that's more than 2.5 times the rate in nonjudicial states where only 2.5 percent of loans are currently in the foreclosure pipeline. Both these figures are significantly higher than the pre-crisis average of 0.5 percent, but it is worth noting that the average year-over-year decline in noncurrent loans for judicial states is less than one percent, whereas in nonjudicial states, it's down 7.1 percent.’

Nationwide, foreclosure sales were up 10% in May, with the increase more pronounced in nonjudicial states. In those states, 6.46% of the existing foreclosure inventory progressed to foreclosure sale in May, as compared to just 2.14% of the inventory in judicial states.

The May data also shows that after a sharp seasonal decline, delinquencies stabilized, up 1.1% for the month to 7.2%, but still down almost 12% year to date. In addition, new problem loan rates continue to improve, with rates dropping for the eighth consecutive month – reaching a point (1.06%) not seen since July 2007, and well off their January 2009 peak of 2.92%. Finally, foreclosure starts were up for the month, rising 11.6% from April, though still low by historical standards and more than 40% off their September 2010 peak.

The states with the highest percentage of noncurrent loans were Florida, Mississippi, New Jersey, Nevada and Illinois. The states with the lowest percentage of noncurrent loans were Montana, Alaska, South Dakota, Wyoming and North Dakota.


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