Late Stage Delinquencies & Foreclosures Continue to Rise

by devteam June 1st, 2010 | Share

A newrnreport says that any signs of stabilization in thernnation's home loan delinquency and foreclosure rates are still beingrnneutralized by the sheer volume of loans in distress.

Thernreport, released by Lender Processing Services basedrnon data current at the end of April, reported there are morernthan 7.3 million loans in distress nationwide, a number which includes real estate ownedrn(REO).  Compared to one year ago, overallrndelinquency and foreclosure figures were up markedly.  In April 2009 the number of distressed loansrntotaled 6.36 million.  The increase did however occur principally in the later stages of delinquency.  Loans 30+ in arrears declined from 1.63rnmillion to 1.48 million while those in the 60+ bucket were down from 0.72rnmillion to 0.63 million.   In the 90+ dayrncategory, loans were up from 1.69 million to 2.39 million and the number ofrnforeclosures increased from 1.44 million to 1.71 million.

Thernreport said that the increase in the numbers of loans in the 90+ andrnforeclosure buckets was being driven by borrowers in the Home AffordablernModification Program (HAMP).  The averagerndays of delinquency also increased substantially, probably also a reflection ofrnHAMP activity.  In April 2009, thernaverage days a loan was in the 90+ bucket  was 203.  In the most recent report the average wasrn275.  Similarly, average days ofrndelinquency for loans in foreclosure increased from 329 to 438.

Newrnproblem loans, or loans that were current as of January 1 but have since fallenrn60 days delinquent as of April, are lower than one year ago but still elevatedrncompared to historic levels.

Thernreport puts the U.S. loan delinquency rate at 8.99 percent and the totalrnforeclosure rate at 3.18 percent.

Overallrnthere was some improvement in the total number of distressed loans seen since the Marchrnreport.  The number ofrndistressed loans fell from 7.39 million to 7.31 million. Loans 90+ daysrndelinquent declined to 4,074,433 from 4,186,627 one month earlier.  60+ delinquencies loansrnwere down by about 28,000 to 631,000. rn30+ day delinquent loans increased on a month-to-month basis from 1.45 million inrnMarch to 1.48 million in April.

Conversely, the reportrnsaid, “deterioration ratios remain high, with two loans rolling to a 'worse'rnstatus for every one loan that has improved and the overall volume of loansrnmoving from delinquent to current status declined to a three-month lowrnsupported primarily by “artificial cures” associated with HAMPrnmodifications.”

Foreclosurernsales increased from 1.1 million to 1.13 million, as, the report said, morernloans are deemed ineligible for HAMP and are moving through the system.

Eightrnstates lead the nation in foreclosure. rnTheir names are familiar by now; Florida, Nevada, Mississippi, Arizona, Georgia, California, Illinois,rnNew Jersey, Michigan and Rhode Island; while North Dakota, South Dakota,rnWyoming, Alaska, have the fewest non-current loans.

The Monitor report uses arnrepository of loan-level residential mortgage data and performance informationrnmaintained by Lender Processing Services for nearly 40 million loans.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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