Loan Delinquencies Increase in April as Downward Trend for Fewer New Problem Loans Continues

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Based on the April Mortgage Monitor Report released this week by Lender Processing Services (NYSE: LPS) shows an expected historical seasonal increase in delinquencies, but a continuing trend in fewer new problem loans.

While April is consistently the month with the largest increases in new delinquencies, in 2011 this increase was the largest it has been in a number of years. At the same time, though delinquencies increased by 2.4 percent in April, they still remain well below the levels of January of this year and more than 25 percent lower than the peak seen in January 2010.

The April data shows that new problem loans, currently at 1.28 percent, have hit three-year lows, with the rate now at less than half of 2009's peak levels. The report also shows the impact of the ongoing process reviews and moratoria as both foreclosure starts and sales decreased significantly in April. Foreclosure starts were down nearly 31 percent from the prior month, while foreclosure sales also declined and remain well below pre-moratoria levels.

Continuing the upward trend seen for more than three years, foreclosure timelines continue to extend. As of the end of April, the average loan in foreclosure was 567 days past due, which is the longest period on record. In fact, 33 percent of loans in foreclosure have not made a payment in more than two years.
 
Key results from LPS' latest Mortgage Monitor report include:

• Total U.S. loan delinquency rate: 7.97%

• Month-over-month change in delinquency rate: 2.4%

• Total U.S foreclosure pre-sale inventory rate: 4.14%

• Month-over-month change in foreclosure pre-sale inventory rate: -1.6%

• States with highest percentage of non-current* loans: FL, NV, MS, NJ, GA

• States with the lowest percentage of non-current* loans: MT, WY, AK, SD, ND

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