by Calculated Risk on 2/21/2012 04:02:00 PM

LPS released their First Look report for January today. LPS reported that the percent (and number) of loans delinquent declined in January from December, but that the percent (and number) of loans in the foreclosure process increased slightly.

The following table shows the LPS numbers for January 2012, and also for last month (Dec 2011) and one year ago (Jan 2011).

LPS: Loans Delinquent and in Foreclosure
	Jan-12	Dec-11	Jan-11
Delinquent	7.97%	8.15%	8.90%
In Foreclosure	4.15%	4.11%	4.16%
Less than 90 days	2,226,000	2,309,000	2,551,000
More than 90 days	1,772,000	1,792,000	2,168,000
In foreclosure	2,084,000	2,066,000	2,203,000
Total	6,082,000	6,167,000	6,922,000

At the current rate of decline, the number of delinquent lonas will be back to "normal" in about three years (around 4.5% to 5% of loans are delinquent even in good times). However the number of loans in the foreclosure process hasn't change year-over-year - although that will probably change soon with the mortgage servicer settlement (around 0.5% of loans in foreclosure is "normal").

by Calculated Risk on 2/21/2012 11:57:00 AM

Note: Vehicle miles have moved sideways for over four years. And gasoline consumption has declined slightly over the same period. For a discussion of the causes, see NDD's post at the Bonddad blog this morning: Why the decline in gasoline demand doesn't mean a recession -- yet. Among other points, NDD writes: "It appears that gasoline conservation is a top priority of consumers." and he provides a list (with data): Ridership of mass transit is up, online retail purchases have increased, automakers are selling more fuel efficient cars, teen driving is down, and more.

The Department of Transportation (DOT) reported:

• Travel on all roads and streets changed by +1.3% (3.2 billion vehicle miles) for December 2011 as compared with December 2010.

• Cumulative Travel for 2011 changed by -1.2% (-35.7 billion vehicle miles).

The following graph shows the rolling 12 month total vehicle miles driven.

Even with a small year-over-year increase in December, the rolling 12 month total is mostly moving sideways.

Click on graph for larger image.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 49 months - and still counting!

The second graph shows the year-over-year change from the same month in the previous year.

This is the first year-over-year increase in miles driven since February 2011.

With the recent increases in gasoline prices, we might see year-over-year declines again in January or February. But this doesn't mean a recession - instead, as NDD notes, it appears that behavior is changing, and also that the fleet is becoming more efficient ... and, of course, growth is still sluggish and holding back driving too.

by Calculated Risk on 2/21/2012 10:03:00 AM

From economist Tom Lawler: Number of Seriously-Delinquent FHA-Insured SF Loans Jumped Again in January; HUD Secretary “Fiddles” as FHA Burns

Data from the FHA’s Neighborhood Watch Early Warning System indicate that the number of FHA-insured loans that were seriously delinquent jumped again in January. According to report on the EWS for servicers who combined have an “active” FHA servicing portfolio of over 7.33 million loans, 732,775 of these loans were seriously delinquent at the end of January. While this report does not exactly match the SDQ numbers reported in various monthly FHA reports (which have not yet been released in January, it tracks the “official” numbers pretty closely. These data, combined with other data from the EWS (not shown here), suggest that the performance of the FHA’s pre-2010 book has continued to deteriorate significantly.

Based on this report, I estimate that the serious delinquency rate on FHA’s SF book in January (as measured by the FHA Monthly Outlook and/or FHA Monthly Report to the FHA commissioner) jumped to around 9.9% last month, up from 9.59% in December, 8.18% last June, and 8.89% last January.

As I noted last week, the pace of FHA loan modifications slowed dramatically in the latter part of last year, while the pace of property “conveyances” was shockingly low given the large number of seriously delinquent/in-foreclosure loans. Obviously, the slow pace of problem-loan “resolutions” has been at least partly behind the sharp increase in the number of seriously-delinquent FHA loans.

Many find it moderately disturbing that HUD Secretary Donovan has of late been working mainly on the big “mortgage settlement” -- and even worked to have part of the mortgage settlement money go to FHA – and has been “jawboning” Fannie and Freddie to “embrace” principal write-downs, while at the same time FHA’s problem-loan resolution activity plunged and the number of seriously delinquent FHA loans has surged. However, headlines such as “Donovan Fiddles as FHA Burns” seem a bit strong – but I used it anyway!

by Calculated Risk on 2/21/2012 08:30:00 AM

The Chicago Fed released the national activity index (a composite index of other indicators): Index shows economic growth in January again above average

The Chicago Fed National Activity Index decreased to +0.22 in January from +0.54 in December, but remained positive for the second straight month for the first time in a year. ...

The index’s three-month moving average, CFNAI-MA3, increased from +0.06 in December to +0.14 in January, reaching its highest level since March 2011. January’s CFNAI-MA3 suggests that growth in national economic activity was slightly above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.

Click on graph for larger image.

This suggests growth slightly above trend in January - but still not strong growth.

According to the Chicago Fed:

A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values indicate below-average growth; and positive values indicate above-average growth.

by Calculated Risk on 2/20/2012 10:01:00 PM

Reuters (via Peter Spiegel) Euro zone finance ministers strike deal on second Greek package. Financing of 130 bln euros, debt-to-GDP of 121 pct by 2020

Update: From Reuters: Euro zone strikes deal on second Greek bailout package

Euro zone finance ministers struck a deal ... that includes new financing of 130 billion euros and aims to cut Greece's debt to 121 percent of GDP by 2020, two EU officials said.

"The financial volume (of the Greek package) is 130 billion euros and debt-to-GDP (will be) 121 percent. Now it's down to work on the statement," one official involved in the negotiations told Reuters.
...
Private sector holders of Greek debt are expected to take losses of up to 53.5 percent on the nominal value of their bonds as part of a debt exchange that will reduce Greece's debts by around 100 billion euros.

Press conference soon

EU Press Releases (no statement yet)