The November Mortgage Monitor report released by Lender Processing Services, Inc. (LPS) shows that the volume of loans moving to REO continued to drop as moratoria further delayed foreclosure sales. While the 90+ delinquency category has steadily declined, the number of loans moving to seriously delinquent status beyond 90 days far outpaced the number of foreclosure starts. Nearly 2.2 million loans are 90 days or more delinquent but not yet in foreclosure.Charts From The Report
Foreclosure inventories also continued to rise for the fifth straight month as delinquent accounts are referred for foreclosure, but the sale of foreclosure properties continued to decline. When compared to January 2008 levels, the foreclosure inventory of Jumbo Prime loans is nearly seven times higher; the inventory of Agency Prime loans is nearly six times higher; and the foreclosure inventory of Option ARM loans is approaching five times the inventory in January 2008.
The report also shows that one-third of loans that are 90 days or more delinquent have not made a payment in a year; however, the number of new problem loans declined nearly 5.4 percent from October, which is opposite of the seasonality trend that typically impacts new delinquencies this time of year. Self-cures for loans one to two months delinquent increased in November to a six-month high.
In the month of November, 261,153 loans were referred to foreclosure, which represents a 0.7% month-over-month decline. The total number of delinquent loans is nearly 2.1 times historical averages - and foreclosure inventory is currently at 7.7 times historical averages.
As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include:
- Total U.S. loan delinquency rate: 9.02 percent
- Total U.S. foreclosure inventory rate: 4.08 percent
- Total U.S. non-current* loan rate: 13.10 percent
- States with most non-current* loans: Florida, Nevada, Mississippi, Georgia, New Jersey
- States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Montana
The report is 34 pages long. Inquiring minds may wish to give it a closer look. Here are a few select charts.
click on any chart for sharper image
Delinquent and Foreclosure Rates by Month
Total Delinquency Percent Excluding Foreclosures
Total Foreclosure Percent By Product
Foreclosure Increase Compared to January 2008
Loan Cures
Serious Delinquencies
Foreclosure Starts vs. Serious Delinquencies
While there are some welcome trends in direction, actual foreclosures are lagging. The pent-up need to foreclose is huge.
Moreover, mortgage rates have rising nearly a full percentage point in the last 45 days. This will put a damper on already depressed home sales, making it harder to unload inventory.
Look for months of inventory to soar in the upcoming months with continued declines in home prices. Contrary to what most think, falling prices are a good thing. Home prices need to fall to a point low enough where genuine demand kicks in.
Foreclosure moratoriums are counterproductive and exacerbate existing problems.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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