Delinquencies Slow But They Exceed Modifications

 Though the rate of delinquent mortgages is slowing, the number of loans that are delinquent 60 days or more since the first of the year exceed the total number of loans modified through private and governmental programs.

The February 2010 Mortgage Monitor report, released by Lender Processing Services, Inc. shows that while delinquency rates in the U.S. have risen to historic highs, the pace of deterioration has slowed. However, the nation’s housing market remains far from a full recovery.

 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 one million properties in REO 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 extraordinary loss mitigation efforts that have resulted in the execution of approximately two million loan modifications – including the federal government’s Home Affordable Modification Program (HAMP) trial periods – the number of new delinquencies since January 1, 2009, still exceeds this number by 25 percent.

 The nation’s pool of problem loans continues to grow and stagnate. More than 31 percent of loans that have been delinquent for six months are not yet in foreclosure, while 22.8 percent of loans delinquent for 12 months have not been moved to foreclosure status (up from 9.0 percent 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 percent of all newly delinquent loans for the month.

Other key results from LPS’ January 2010 Mortgage Monitor include:

 Total U.S. loan delinquency rate:         10.2 percent

 Total U.S. foreclosure inventory rate:    3.3 percent

 Total U.S. non-current loan rate:         13.5 percent

 States with most non-current loans: Florida, Nevada, Mississippi, Arizona, Georgia, California, Indiana, Illinois, Michigan and Ohio

 States with fewest non-current loans:     North Dakota, South Dakota, Alaska, Wyoming, Montana, Nebraska, Vermont, Colorado, Oregon and Wa

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