Foreclosure starts fall in April
According to the April Mortgage Monitor report released by Lender Processing Services (LPS) Thursday, overall foreclosure starts fell 2.6 percent in April, with FHA foreclosure starts spiking an alarming 73 percent during the month, which LPS says “was driven primarily by defaults in 2008 and 2009 vintage loans, though all FHA vintages saw increases in foreclosure starts in April, despite that fact that the more recent vintages – from 2009 forward – have shown improved relative credit performance.”
“In 2008, when the loan origination market virtually dried up, the FHA stepped in to fill the void,” explained Herb Blecher, senior vice president for LPS Applied Analytics. “FHA originations tripled that year, and increased to five times historical averages in 2009. High volumes like that, even with low default rates, can produce larger numbers of foreclosure starts. That represents a lot of loans to work through – the 2008 vintage alone represents some $14 billion of unpaid balances in foreclosure, and the overall FHA foreclosure inventory continues to rise.”
The April data also showed that foreclosure sales continue to remain low nationally, decreasing 2.6 percent month-over-month, and with volume that remains about one-third that of foreclosure starts. Foreclosure sales in non-judicial states dropped 2.0 percent, and those in judicial states remained basically flat, down just 0.01 percent over the month. Even those states that saw increases in foreclosure sales saw only incremental increases in terms of real numbers, and all were still far below pre-moratoria levels.
Total loan delinquency rate at 7.12 percent
LPS reports that the total U.S. loan delinquency rate is 7.12 percent, up 0.4 percent for the month, as the total foreclosure pre-sale inventory rate hitting 4.14 percent, the same as the month prior.
Just as in months prior, Florida, Mississippi, Nevada, New Jersey and Illinois continue to have the highest percentage of non-current loans while Montana, Alaska, South Dakota, Wyoming and North Dakota continue to have the lowest percentage of non-current mortgages.