Thursday, January 31, 2013

LPS: Fewer Delinquencies in 2012, Highest level of Mortgage Originations since 2007

by Bill McBride on 1/31/2013 05:05:00 PM

LPS released their Mortgage Monitor report for December today. According to LPS, 7.17% of mortgages were delinquent in December, up from 7.12% in November, and down from 7.89% in December 2011.

LPS reports that 3.44% of mortgages were in the foreclosure process, down from 3.51% in November, and down from 4.20% in December 2011.

This gives a total of 10.61% delinquent or in foreclosure. It breaks down as:

• 2,031,000 properties that are 30 or more days, and less than 90 days past due, but not in foreclosure.
• 1,545,000 properties that are 90 or more days delinquent, but not in foreclosure.
• 1,716,000 loans in foreclosure process.

For a total of ​​5,292,000 loans delinquent or in foreclosure in December. This is down from 6,192,000 in December 2011.

This following graph from LPS shows the total delinquent and in-foreclosure rates since 1995.

Delinquency Rate Click on graph for larger image.

Even though delinquencies were up slightly in December, it was mostly seasonal. From LPS:

The December Mortgage Monitor report released by Lender Processing Services and covering performance data for the full 2012 calendar year, found that while mortgage delinquency rates remained at elevated levels, they have shown steady improvement, ending the year 32 percent lower than the January 2010 peak. Additionally, following a year of regional improvement in foreclosure inventories (marked by stark contrasts between judicial and non-judicial foreclosure states), the national foreclosure inventory rate began to decline toward the end of 2012 from historic highs experienced during the crisis.
LPS also reported:
“Though still a long way off from the historic level of originations that preceded the mortgage crisis, 2012 was the strongest full year of originations we’ve seen since 2007,” [LPS Applied Analytics Senior Vice President Herb Blecher] said. “Volumes were up approximately 34 percent year over year, with about 8.6 million new loans originated. And, while the majority of these new loans were government-backed – 84 percent in 2012 as compared to just over 50 percent at the peak – the trend over the last four years does suggest a slowly resurgent non-agency lending market.”
LPS Mortgage MonitorThe second graph from LPS shows negative equity. From LPS:
[T]his month’s Mortgage Monitor also found that 2012’s appreciation in home prices has helped to improve the U.S. equity situation and create even more refinance opportunities:

• Overall, negative equity is down 35 percent since the beginning of the year.

• Nearly 4 million loans that were below conforming loan-to-value (LTV) thresholds for refinancing last year would meet those standards today.

• An additional 3.4 million loans that are on the cusp of conforming loan-to-value thresholds stand to benefit, if the home price situation continues to improve.
This means more borrowers can either refinance or sell their homes.

There is much more in the mortgage monitor.

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