A “first-look” report issued by Lender Processing Services, one of the countries largest loan servicers and aggregators of loan performance data, is somewhat encouraging as it shows the U.S. mortgage delinquency rate (not including foreclosures) for October was 9.29 percent and, while that is a terribly high rate, it is just barely higher than Septembers’ rate of 9.27 percent. Mortgage delinquencies are a “leading indicator” of foreclosures, so perhaps that means we are getting close to the foreclosure activity leveling off.
Having said that, the foreclosure rate for October was 3.92 percent, a 2.1 percent increase from September and a 5.2 percent increase from a year ago. In addition, my contacts with some of the larger law firms that handle the bulk of the foreclosures tell me that December and January are both going to be huge months for foreclosures. This is due, in part, to the voluntary moratoriums large lenders, such as Bank of America, put in place after concerns were raised about “robo-signing” of foreclosure affidavits and other irregularities in the foreclosure process which have now been lifted.
So expect to see the foreclosure rate continue upward for the next couple of months, but if the mortgage delinquency rate can continue holding steady and, hopefully in the near-term, start heading downward, we should see foreclosures begin to ease and take some pressure off the housing market. Amen!
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