Wednesday, April 14, 2010

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Despite servicers' efforts to modify unprecedented volumes of troubled
mortgages and a large-scale government-led program put in place to stem the
nation's viral foreclosure epidemic, they haven't been enough to keep up
with the rapid pace of loan deterioration, according to new data from Lender
Processing Services (LPS).

A market report released by the company
Monday shows that the total number of
delinquent loans as of the end of February was 21.3 percent higher than it
was a year earlier. Although the data showed a small 1.45 percent seasonal
decline in delinquencies from January 2010 to February 2010, LPS reported
that the national delinquency rate still stood at 10.2 percent.

Although delinquencies remained relatively level, the nation's foreclosure
inventories reached record highs in February. Based on LPS' analysis, the
foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year
increase.

Furthermore, the percentage of new problem loans is also at its highest
level in five years. LPS found that more than 1.1 million loans that were
current at the beginning of

January 2010 were already at least 30 days delinquent or in foreclosure by
February 2010 month-end.

According to the company's data, the number of non-current first-lien
mortgages and REO properties now total more than 7.9 million loans.

LPS noted in its report that as a result of the federal government's Home
Affordable Modification Program (HAMP), delinquent loans that were modified
and that remained current through HAMP's three-month trial period - called
"cures-to-current" - have increased. Advanced delinquency rolls, however,
remain elevated from a historical perspective, the company said.

Both delinquency and foreclosure inventories remain bloated, LPS said,
thanks to high volumes of problem loans in combination with prolonged loss
mitigation efforts and foreclosure moratoria.

With 10.2 percent of borrowers delinquent and 3.3 percent in foreclosure,
the nation's total rate of non-current loans has hit 13.5 percent, LPS said.


Based on the company's analysis, the states with the most non-current loans
include: Florida, Nevada, Arizona, Mississippi, California, New Jersey,
Georgia, Illinois, Ohio, and Indiana.

The states with fewest non-current loans are: North Dakota, South Dakota,
Alaska, Wyoming, Nebraska, Montana, Vermont, Colorado, Washington, and
Minnesota.

Commentary from Freddie Mac 's economic team
Monday says, "The current large backlog of seriously delinquent mortgages
remains a daunting prospect for many local markets across the country, and
it may take two years or more to return to more normal housing market
conditions."


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