The national foreclosure inventory remains near all-time highs through May, said Lender Processing Services in its monthly Mortgage Monitor report.
According to the Jacksonville, Fla.-based analytic firm, 4.12% of all active mortgages across the country are in the foreclosure pipeline, while 3.2% of the nation’s mortgage loans are considered to be seriously delinquent.
Foreclosure inventory in judicial states is more than two times greater than nonjudicial states. In judicial states, 6.5% of all mortgage loans are in some stage of foreclosure, compared to only 2.5% in states that don’t use the courts to conduct a foreclosure.
LPS said nearly 53% of loans that are in foreclosure in states that follow a judicial foreclosure process have been delinquent for more than two years. Meanwhile, just over 30% of loans in nonjudicial states that are in the foreclosure process are two years past due.
Another reason why the national foreclosure inventory continues to be high is due to foreclosure starts outnumbering sales by a 3-to-1 ratio in May. Despite both foreclosure starts and sales showing month-over-month increases, LPS revealed that there were 202,707 foreclosure starts in May while there were only 73,439 sales.
The analytic firm said 90-day defaults have held lower than foreclosure starts over the last three months.
Nationally, foreclosure sales were up 10% in May with the increase more prominent in nonjudicial states. In those states, 6.5% of the existing foreclosure inventory was sold, while only 2.1% of foreclosed properties were taken off the market in judicial states.
Even though there has been improvement between judicial and nonjudicial pipeline ratios over the last year, LPS said the supply of seriously delinquent loans and foreclosed properties is still twice as much in judicial states where there is 74 months of inventory compared to 34 in nonjudicial states.
