Foreclosures Still Rising, Delinquencies See Small Seasonal Drop

Foreclosure starts are continuing to rise to record highs but total delinquencies fell in March to 7.88%, a month-over-month decrease of 5.8%, according to the April 2009 LPS Mortgage Monitor from Lender Processing Services, Inc., Jacksonville, Fla. The seasonal February to March decline in delinquencies in the five years from 2002 to 2007 averaged 14%, and the number of newly delinquent loans saw a greater decline in March compared to 2008. March's foreclosure rate was 2.52%, reflecting a month-over-month increase of 12.8% and a year-over-year increase of 87.8%. The percentage of loans improving in status continued to increase in March, while loans deteriorating in status declined. The report said foreclosure starts in March hit new all-time highs across every major product category. The largest 12-month increase was seen in jumbo loans at 221%, non-agency conforming loans at 158%, and agency prime loans at 144%. Foreclosure starts on portfolio loans spiked significantly during the month, the company said. GMNA was the only investor category to remain stable for the month. LPS said foreclosure sales dropped significantly in March, due in large part to the reinstatement of the FHFA moratorium in February and continuing through the end of March. The report said refinance activity remains high, with a slight increase in available liquidity to borrowers who are 30-days delinquent.