LPS: Loan Deterioration Ratio Tops 3:1

Lender Processing Services Inc.'s (LPS) November Mortgage Monitor report reveals a nationwide loan deterioration ratio higher than 3:1 – indicating that for every loan that improves, three more loans are deteriorating.

Of home loans that were current as of December 2008, more than two million, or 4.02%, were delinquent or in foreclosure by the end of October 2009. High rates of deterioration were particularly evident in the Northeast and Northwest. Thirty-one states now have non-current loan rates (i.e., delinquency plus foreclosure rates) ranging from 10% in Missouri to as high as 22.7% in Florida.

Foreclosure sales jumped in October, with the rate at 5.6% of foreclosures in inventory. The number of foreclosures on the market continues to stall as foreclosure timelines extend. Nearly 30% of properties that have been in foreclosure for 12 months have not yet been put on the market for sale – twice the level of the prior year.

Foreclosure inventories continued to climb to record levels, with October's foreclosure rate standing at 3.14% – a month-over-month increase of 0.7 percent and a year-over-year increase of 85.1 percent.

Total delinquencies, already at record highs, edged up 0.85% in October over September's figures and were 32 percent higher than the same period last year. Loans rolling to a more delinquent status remain elevated, but totals are below the November 2008 peak. Roll rates into foreclosure remain low as a result of loss mitigation efforts and elevated delinquent-loan volumes.

SOURCE: Lender Processing Services Inc.


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