Biggest Drop for Mortgage Delinquencies Since 2002

Mortgage delinquencies in May postedrnthe largest year-to-date drop seen since 2002 Lender ProcessingrnServices (LPS) said today. Delinquencies were down 15 percent fromrnthe end of December 2012 to a May rate of 6.08 percent. This was arndrop of 2.11 percent from April. LPS Applied Analytics Senior VicernPresident Herb Blecher said that much of this improvement isrnsupported by the fact that new problem loan rates are approaching thernpre-crisis average. </p

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Blecher said, “Though they are<bstill approximately 1.4 times what they were, on average, during thern1995 to 2005 period, delinquencies have come down significantly fromrntheir January 2010 peak. In large part, this is due to therncontinuing decline in new problem loans — as fewer problem loans arerncoming into the system, the existing inventories are working theirrnway through the pipeline. New problem loan rates are now at just 0.73rnpercent, which is right about on par with the annual averages duringrn2005 and 2006, and extremely close to the 0.55 percent average forrnthe 2000-2004 period preceding.”</p

The LPS Mortgage Monitor</ifor May noted that the current delinquency rate is more than 4rnpercentage points below the peak of the mortgage crisis in Januaryrn2010 and delinquencies of prime mortgages are down nearly 50 percentrnfrom that point in time. The total pre-sale inventory rate (homes inrnsome stage of foreclosure) also continued to decline, down 3.91rnpercent from April to 3.05 percent. There were 116,812 foreclosurernstarts during the month compared to 127,496 in April and the lowestrnnumber in at least the last 12 months.</p