Judicial, Non-Judicial States Have Significant Differences in Inventories, Foreclosure Timelines

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Based on the September Mortgage Monitor Report released by Lender Processing Services, continue to show significant differences between states that process foreclosures following a judicial vs. non-judicial foreclosure process.

Ranked by the percentage of loans that are non-current, seven of the top 10 states are judicial foreclosure states. Foreclosure inventories in these states continue to climb, accounting for nearly seven percent of the entire active loan count.

Additionally, foreclosure timelines in these states continue to extend at a greater rate than in non-judicial foreclosure states. The time from last payment to foreclosure sale in judicial states is 761 days, which is six months longer than in non-judicial states. Consequently, foreclosure sales in judicial foreclosure states remain very low, with only 1.6 percent of those states' foreclosure inventories moving to sale.

Overall, foreclosure starts in September were slightly below the three-year average. Foreclosure timelines continue to increase across the board - almost 40 percent of loans in foreclosure have not made a payment in two years, and 72 percent have not made a payment in a year or more. New problem loan rates increased sharply over the last two months, with 1.6 percent of loans that were current six months ago now 60 or more days delinquent or in foreclosure.

Key results from LPS' latest Mortgage Monitor report include:

• Total U.S. loan delinquency rate:       8.09%
• Month-over-month change in delinquency rate:    -0.5%
• Total U.S. foreclosure pre-sale inventory rate: 4.18%
• Month-over-month change in foreclosure pre-sale inventory rate:  1.7%
• States with highest percentage of non-current* loans: FL, MS, NV, NJ, IL
• States with the lowest percentage of non-current* loans: ND, SD, WY, AK, MT

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