The trend toward fewer loans becoming delinquent appears to have halted momentarily, according to the latest mortgage monitor report released by Lender Processing Services.
There were nearly 25% fewer delinquent loans in November than the January 2010 peak, the Jacksonville, Fla.-based analytic provider said, reversing a trend that was evident throughout 2010 and the first quarter of 2011.
However, new problem loans—loans 90 days past due at the end of November that were current six months ago—have not showed significant signs of improvement, projecting possible trouble in the future.
“This degree of stagnation indicates that while the situation is not getting markedly worse, it is not improving either,” LPS said in the report. “Inventories of troubled loans remain significantly higher than pre-crisis levels across the board.”
Overall, the national delinquency rate is 8.15%, a month-over-month increase of 2.7%. The delinquency rate is based on a sample of 40 million loans that includes all mortgages that are 30 days or more overdue.
States that had the highest percentage of loans that resulted in foreclosure and delinquencies were Florida, Mississippi, Nevada, New Jersey and Illinois. However, the states with the lowest percentage of non-current loans were North Dakota, Alaska, Wyoming, South Dakota and Montana.
Meanwhile, LPS said foreclosure starts were down nearly 30% in November from the prior month with more than two million properties in the foreclosure inventory. LPS cited ongoing document reviews, additional state legislation and new regulatory requirements as reasons for the sharp decline.
Refinance activity also remained strong after several months of growth, but originations experienced a month-over-month decline of 12% through November.
