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LPS Reports a Jump in Foreclosure Starts in July

Mon, Aug 30, 2010

Articles

By: Carrie Bay

The Mortgage Bankers Association (MBA) offered the industry a ray of hope when it reported Thursday that foreclosure starts were down nearly 10 percent in the second quarter, but the brightness quickly faded when Lender Processing Services (LPS) released its own dataset.

MBA’s numbers were based on data through the end of June. LPS reports that by the end of July, foreclosure starts had jumped back up by 24.5 percent month-over month, with rebounds in the private markets compounding the recent acceleration in GSE foreclosures and leading to a significant jump in new actions. It’s the fourth highest level ever recorded by the company.

The Florida-based firm says GSE foreclosure starts have already been accelerating in line with trial cancellations from the Home Affordable Modification Program (HAMP), with most of the increase and volume concentrated in the 6-plus-month delinquency category.

LPS says for the first time, new foreclosure starts exceeded the number of new 90-day delinquencies, which dropped by more than 100,000 loans during the month of July alone as these homeowners went into foreclosure.

Cure rates – bringing a past due loan to current status – for loans six or more months delinquent declined in July, according to LPS. Only 60-day cures increased for the month.

The company reports that the industry’s total foreclosure inventory surpassed 2 million loans in July, up 2.6 percent from June and 5.8 percent higher than a year ago.

Based on LPS’ data, total non-current loans, including delinquencies and foreclosures, came to 13.08 percent of mortgages outstanding.

The company says approximately 895,000 loans were current at the beginning of January but were at least 60 days delinquent or in foreclosure as of July month-end.

http://www.dsnews.com/articles/lps-reports-jump-in-foreclosure-starts-july-2010-08-27

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