Monday, October 22, 2012

LPS: Mortgage delinquencies increased sharply in September, Percent in foreclosure process lowest in 2 years

by Bill McBride on 10/22/2012 04:15:00 PM

LPS released their First Look report for September today. LPS reported that the percent of loans delinquent increased in September compared to August, but declined about 4% year-over-year. On the other hand, the percent of loans in the foreclosure process declined sharply in September to the lowest level in almost 2 years.

LPS reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) increased to 7.40% from 6.87% in August. The percent of loans in the foreclosure process declined to 3.87% from 4.04% in August. Note: the normal rate for delinquencies is around 4.5% to 5%.

LPS is looking into the reasons for the increase in the delinquency rate, and will probably provide a discussion in the Mortgage Monitor that will be released in early November. Looking at the table below - that shows the LPS numbers for September 2012, and also for last month (August 2012) and one year ago (September 2011) - most of the increase in delinquencies was in the short term category. The number of serious delinquent properties (90+ days and in-foreclosure) declined 70 thousand from August.

The number of delinquent properties, but not in foreclosure, is down about 7% year-over-year (280,000 fewer properties delinquent), and the number of properties in the foreclosure process is down 9% or 190,000 year-over-year.

The percent (and number) of loans 90+ days delinquent and in the foreclosure process is still very high.

LPS: Percent Loans Delinquent and in Foreclosure Process
Sept 2012August 2012Sept 2011
Delinquent7.40%6.87%7.72%
In Foreclosure3.87%4.04%4.18%
Number of properties:
Number of properties that are 30 or more, and less than 90 days past due, but not in foreclosure:2,170,0001,910,0002,250,000
Number of properties that are 90 or more days delinquent, but not in foreclosure:1,530,0001,520,0001,730,000
Number of properties in foreclosure pre-sale inventory:1,940,0002,020,0002,130,000
Total Properties​5,640,0005,450,0006,130,000

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