Shadow Inventory down 30 Percent Annually

Delinquency rates and incidence of properties in foreclosurernfell again in July, Lender Processing Services (LPS) reports, but more than 4.5rnmillion mortgage loans remain in some category of distress.  The company released a preview of its Mortgage Monitor reflecting conditionsrnat the end of July, a key finding of which was a dramatic year-over-yearrndecrease in the pre-sale foreclosure inventory. </p

The pre-sale inventory was down 2.82 percent from June tornJuly to a total of 1.4 million homes.  SincernJuly 2012 this number has dropped by 30.76 percent.  This so-called shadow inventory has been a majorrnconcern of the housing industry since the beginning of the crisis as it wasrnfeared the sheer size of the backlog of homes that might eventually come intornbank ownership would present a significant barrier to recovery. </p

The delinquency rate, the number of loans that were 30 daysrnor more past due but not in foreclosure, was down 3.96 percent to 6.41 percentrnof U.S. homes with a mortgage.  Thisrnrepresents a -8.76 percent annual reduction in the rate.  At the end of July 3.19 million propertiesrnwere considered delinquent but not in foreclosure and 1.35 million of thosernwere seriously delinquent, i.e. 90 or more days past due but not inrnforeclosure.  </p

Florida, Mississippi, and New Jersey were the states withrnthe highest percentage of non-current loans in July.</p

LPS will release the July Mortgage Monitor with the remainder of its July statistics byrnSeptember 3.

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