Lender Processing Services' latest Mortgage Monitor report revealed that foreclosure starts and sales declined significantly in February from the month before, a sign that the processing backlog problem is still far from resolved.
In January, foreclosure starts increased 28% month-over-month and sales were up 29%, leading to speculation that the pipeline of foreclosed properties that have not been processed might start to work its way through the system following the $25 billion mortgage servicing settlement.
However, foreclosure starts in February were down 15% from the previous month to only 172,502, bringing a halt to this optimism.
According to the Jacksonville, Fla.-based analytic provider, GSE activity was the main cause for both the increase and decrease in foreclosure starts since the beginning of the year.
Meanwhile, foreclosure sales also declined in February from January by 19% with only 74,229 properties sold. Both judicial and non-judicial states saw foreclosure sales drop month-over-month by 22% and 15%, respectively.
Through February, foreclosure inventory in judicial states remains at all-time highs. There are approximately 2.4% more properties in foreclosure in judicial states than the national average of 4.13%. On the other hand, non-judicial states have a foreclosure inventory rate of 2.43%.
LPS said the delinquency rate is at the lowest level since August 2008 at 7.57%, a 5% monthly decline and down 14% from last year. Loans considered to be seriously delinquent hit 7.58%, a 1.4% drop from January and 8% year-over-year.
Mortgage originations continued a four-month decline as 450,334 loans began through February. This is a decline of 16.9% from the month before and 18.6% for the year.
