New Report Shows Foreclosure Inventories At All-Time High

The October Mortgage Monitor report released by Lender Processing Services Inc. shows that accelerated foreclosure referral activity over the last several months has pushed the foreclosure inventory rate to an all-time high. As of the end of October, foreclosure inventories are 7.4 times historical averages and rising.

The report also shows that foreclosure sales decreased dramatically over the last month as a result of the widespread moratoria. Overall, the percentage of loans moving from the foreclosure process to bank-owned status (or other involuntary liquidation) dropped by 35% in October.

As foreclosure activity increases, more six- and 12-month delinquent loans are moving to foreclosure, but the extremely delinquent category (more than 12 months delinquent) continues to grow and age. A payment has not been made in more than year on almost one-third of all loans that are 90 or more days delinquent. And, of loans that have not made a payment in two years, more than 18% are still not in foreclosure.

During October, 263,000 loans entered the foreclosure process, which represents a 4.4% month-over-month decline. Total inventory of foreclosures is nearly 2.1 million loans with another 2.2 million loans in the ‘greater than 90 days delinquent, but not yet in foreclosure’ status.

Although delinquencies remain elevated – currently registering at 2.7 times historical averages – an ever-growing number of new 60-day delinquencies are redefaults of loans that had previously been 60 days or more delinquent, and had become current. The number of first-time troubled loans, however, remained relatively stable during the last several months.

The full report is available online.

SOURCE: Lender Processing Services Inc.


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