Pace Of Delinquencies Slowing, But Rates At All-Time Highs

While mortgage delinquency rates in the U.S. have risen to historic highs, the pace of deterioration has slowed, according to Lender Processing Services Inc.'s (LPS) February Mortgage Monitor report. That said, the housing market remains far removed from a full recovery, the company says.

Based on data extrapolated from the LPS servicing database, nearly 7.5 million loans are in some stage of delinquency or foreclosure, with an additional 1 million properties in real estate owned or post-sale foreclosure.

In addition, approximately 2.5 million loans that were current on Jan. 1, 2009, were 60 or more days delinquent (including foreclosures) as of Jan. 31, 2010. Despite loss mitigation efforts that have resulted in the execution of approximately 2 million loan modifications – including the federal government's Home Affordable Modification Program trial periods – the number of new delinquencies since Jan. 1, 2009, still exceeds this number by 25%.

The nation's pool of problem loans continues to grow and stagnate, LPS says. More than 31% of loans that have been delinquent for six months are not yet in foreclosure, while 22.8% of loans delinquent for 12 months have not been moved to foreclosure status (up from 9% in 2008).

Older loans now make up a higher proportion of new delinquencies, as more loans experience repeat delinquencies. The average loan age of newly delinquent loans is now 46 months, as compared to an average newly delinquent loan age of 27 months in January 2007.

During January 2010, 346,000 borrowers became delinquent for the first time, representing approximately 40% of all newly delinquent loans for the month.

SOURCE: Lender Processing Services


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