Monday, August 05, 2013

LPS: Seasonal Increase in Mortgage Delinquencies in June

by Bill McBride on 8/05/2013 08:57:00 AM

LPS released their Mortgage Monitor report for June today. According to LPS, 6.68% of mortgages were delinquent in June, up from 6.08% in May. The increase was in short term delinquencies, and most of this increase was seasonal (delinquencies usually increase in June).

LPS reports that 2.93% of mortgages were in the foreclosure process, down from 4.09% in June 2012.

This gives a total of 9.61% delinquent or in foreclosure. It breaks down as:

• 1,983,000 properties that are 30 or more days, and less than 90 days past due, but not in foreclosure.
• 1,345,000 properties that are 90 or more days delinquent, but not in foreclosure.
• 1,458,000 loans in foreclosure process.

For a total of ​​4,785,000 loans delinquent or in foreclosure in June. This is down from 5,663,000 in June 2012.

Delinquency Rate Click on graph for larger image.

The first graph from LPS shows percent of loans delinquent and in the foreclosure process over time.

From LPS:

“June’s increase in delinquencies is representative of a documented seasonal phenomenon,” [LPS Applied Analytics Senior Vice President Herb Blecher] said. “Over the last 18 years, similar changes occurred in June for all but four of those years. And this month’s increase was felt across all 50 states -- from a roughly 14 percent month-over-month rise in 30-day delinquencies in Nevada to a nearly 32 percent upswing in Colorado. ...

“Of course, focusing solely on month-to-month shifts in mortgage performance can be like tracking the stock market on a daily basis,” Blecher continued. “You may see periodic spikes and dips, but without a longer-term perspective, you lack a clear picture of how the market is actually performing. Though June’s 9.9 percent spike was indeed significant -- and a reversal of five consecutive months of declines -- on a quarterly basis, the rise was much more moderate than the historical average. Since 1995, delinquency rates have risen from Q1 to Q2 in all but two years, with an average 7 percent increase. By comparison, the 2013 Q1 to Q2 increase was just 1.34 percent.”
LPS Mortgage MonitorThe second graph compares the percent of loans in the foreclosure process in judicial and non-judicial foreclosure states.

From LPS:
Foreclosure inventories in judicial states are 26% off their peak vs. 50% in non-judicial ... Distressed inventory in the northeast remains close to peak
Foreclosure inventories peaked much earlier in non-judicial states, and have fallen quicker.

There is much more in the mortgage monitor.