Foreclosure inventory remains near all-time high

According to a report just released by Lender Processing Services, the foreclosure inventory in the U.S.  remains near all-time highs, with 4.12 percent of all active mortgages in the foreclosure pipeline in addition to the 3.2 percent that are 90 days or more delinquent but have not yet begun the foreclosure process.   Foreclosures put an immense amount of downward pressure on home prices and until the foreclosure rate recedes back toward normal levels it is going to be hard for home prices to have a sustainable recovery.  On a good note, the high foreclosure levels are, for the most part in states that require a judicial foreclosure (a lengthier process) where 6.5 percent of all loans are in some state of foreclosure as opposed to states with non-judicial foreclosures where only 2.5 percent of loans in in the foreclosure process.  Both percentages are considerably higher than the pre-real estate meltdown average of 0.5 percent.

The report shows that mortgage delinquencies have stabilized, rising just 1.1 percent for the month to 7.2 percent but the rate is down almost 12 percent year to date.  Another encouraging statistic is the rate of new problem loans, the rate of which has dropped for 8 consecutive months reach a rate of 1.06 percent which is the lowest since July 2007.

As reported in LPS’ First Look release, other key results from LPS’ latest Mortgage Monitor report include:

Source: LPS First Look

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