Mortgage delinquencies decline in August; down almost 12 percent from year ago

I keep saying that, until the foreclosure rate gets back down closer to a “normal” rate and the REO inventory is absorbed to the point where they are no longer putting such immense downward pressure on home prices, we are not going to see any sort of sustainable recovery in the housing market. It all starts with mortgage delinquencies, and as those go so go foreclosures and REO inventory ultimately. Having said that, we have some good news: A “first-look” report issued by Lender Processing Services, one of the countries largest loan servicers and aggregators of loan performance data, shows mortgage delinquencies decreased 2.5 percent in August from the month before and decreased 11.8 percent from the year before. According to the report, the U.S. foreclosure pre-sale inventory rate increased 0.1 percent from the month before and was up 8.2 percent from the year before.

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 8.13%
Month-over-month change in delinquency rate: -2.5%
Year-over-year change in delinquency rate: -11.8%
Total U.S. foreclosure pre-sale inventory rate: 4.11%
Month-over-month change in foreclosure presale inventory rate: 0.1%
Year-over-year change in foreclosure presale inventory rate: 8.2%
Number of properties that are 30 or more days past due, but not in foreclosure: (A) 4,249,000
Number of properties that are 90 or more days delinquent, but not in foreclosure: 1,866,000
Number of properties in foreclosure pre-sale inventory: (B) 2,148,000
Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) 6,397,000
States with highest percentage of non-current* loans: FL, MS, NV, NJ, IL
States with the lowest percentage of non-current* loans: MT, WY, AK, SD, ND

Source: LPS “First Look” Mortgage Report, August, 2011

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