Saturday, March 26, 2011

LPS: Overall mortgage delinquencies declined slightly in February

by Bill McBride on 3/26/2011 10:24:00 PM

• Here is the Summary for Week ending March 25th.
• Lawler: Census 2010 and Excess Vacant Housing Units

LPS Applied Analytics recently released their February Mortgage Performance data. From LPS:

•Delinquency rates resumed their decline after an increase in January and foreclosure inventories remain stable, slightly below historic highs.
• Delinquencies continue to improve as new problem loan rates decline and cure rates increase.
• Foreclosure start declines and foreclosure suspensions are reducing the upward pressure on inventories caused by foreclosure sale moratoria.
• An enormous backlog of foreclosures still exists with overhang at every level:
–There are three times the number of loans deteriorating greater than 90+ days delinquent as compared to foreclosure starts.
–There are also three times the number foreclosure starts vs. foreclosure sales.
–Foreclosure inventory levels are over 30 times monthly foreclosure sale volume.
Delinquency Rate Click on graph for larger image in graph gallery.

This graph provided by LPS Applied Analytics shows the percent delinquent, percent in foreclosure, and total non-current mortgages.

The percent in the foreclosure process has been trending up because of the foreclosure moratoriums.

According to LPS, 8.80% of mortgages are delinquent (down from 8.90% in January), and another 4.15% are in the foreclosure process (about the same as 4.16% in January) for a total of 12.96%. It breaks down as:

• 2.49 million loans less than 90 days delinquent.
• 2.16 million loans 90+ days delinquent.
• 2.2 million loans in foreclosure process.

For a total of 6.86 million loans delinquent or in foreclosure.

Delinquency RateThe second graph shows the break down of serious deliquencies.

The number of seriously delinquent loans has stopped decreasing - mostly because the number of seriously delinquent loans that have not made a payment in over a year continues to increase.

Note: I've seen some people include these almost 7 million delinquent loans as "shadow inventory". This is not correct because 1) some of these loans will cure, and 2) some of these homes are already listed for sale (so they are included in the visible inventory).