Foreclosure starts and sales increased significantly in January, a sign that the processing backlog may be starting to clear, according to a new report from Lender Processing Services.
LPS reported 203,458 foreclosure starts in January, a 28% increase from December but a 12% decline year over year.
Meanwhile, repeat foreclosures hit a new all-time high in January: 47%, according to the firm's monthly mortgage monitor report.
Foreclosure starts in judicial states increased almost twice that of non-judicial states. Rhode Island, Texas, New Jersey, Florida and South Dakota experienced the most foreclosure starts in January.
Meanwhile, foreclosure sales rose 29% in January month-over-month. Consumers and investors bought 91,086 properties across the nation with foreclosure sales in non-judicial states outpacing judicial states by a 3:1 ratio. However, foreclosure inventory in judicial states is still more than two-and-a-half times greater than non-judicial states.
The top five states with increases in foreclosure sales include Nebraska, Delaware, Louisiana, South Dakota and Arkansas.
LPS also reported that the national mortgage delinquency rate fell to 7.97%, an 11% drop year-over-year.
Loans considered seriously delinquent—90 or more days past due—increased only 0.2% from December bringing the total to 7.69%. Top five states for new seriously delinquent loans are Nevada, Florida, Mississippi, Arizona and Georgia.
LPS said 40% of loans nationwide that are in foreclosure are at least two years past due.
January's foreclosure rate hit 4.15%, up 1.1% from the previous month but down slightly (0.1%) over the course of the year.
Over 510,000 new loans were originated in January, down 10.7% from the prior month and nearly 33% for the year.
New problem loan rates are still relatively low nationally at 1.4%, but LPS said “pockets of trouble exist.” According to LPS, 27.6 million borrowers are eligible to refinance their loan through HARP 3.0, but only 6.8 million are considered to be “probable” for this opportunity.
