Last month both foreclosure starts and sales suddenly retreated, declining quickly on a month-over-month basis after a sharp increase in January.
Foreclosure starts were down 15 percent from January and sales were down 19 percent for the same period. Foreclosure sales decreased in both judicial and non-judicial foreclosure states, dropping 22 and 19 percent month-over-month respectively in February, according to Lender Processing Services’ Mortgage Monitor report.
The LPS mortgage performance data showed that, while January’s increase in foreclosure sales was most pronounced in loans held on bank portfolios, the February drop was broad-based across all investor classes. Even accounting for the decrease in foreclosure sales, national pipeline ratios continue to decline off their peaks, but still differ sharply by region. As of the end of February, the average pipeline ratio in judicial states stood at 84 months, as compared to 33 months in non-judicial states. Pipeline ratios continue to be most pronounced in the Northeast, particularly in New York and New Jersey, where average pipelines remain at 846 and 772 months respectively.
The February data predates the signing of the multi-state Attorneys-General agreement in March, which is expected to result in new processing standards and expedited processing of properties in foreclosure pipelines.
The February mortgage performance data also showed that continued declines in new problem loan rates helped to improve delinquency rates nationwide. Seasonal patterns are also evident in cures from delinquency, with increased cure rates across almost all categories of delinquent loans. Additionally, first-time foreclosures remained stable as repeat foreclosures saw an 8 percent month-over-month decrease. At the same time however, new mortgage originations remain depressed, continuing a four-month decline.
Other key results from LPS’ latest Mortgage Monitor report include:
Total U.S. loan delinquency rate: 7.57 percent
Month-over-month change in delinquency rate: -5.0 percent
Total U.S. foreclosure pre-sale inventory rate: 4.13 percent
Month-over-month change in foreclosure pre-sale inventory rate: -0.5 percent
States with highest percentage of non-current loans: FL, MS, NV, NJ, IL States with the lowest percentage of non-current* loans: MT, AK, WY, SD, ND. Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.