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US loan delinquency rate spikes after months of declines

Seasonal increase arrives as expected, still below year-ago levels

The total U.S. loan delinquency rate as measured by Lender Processing Services (LPS) shot up 9.91% from May to June, reaching a rate of 6.68%.

The spike in delinquencies arrives after five straight months of improved loan performance. The rate released by LPS measures all loans 30 days or more past due, but not in foreclosure. The survey is compiled from data within LPS’s loan-level database, a system that covers approximately 70% of the overall mortgage market.

Despite an uptick in delinquencies, the country’s delinquency rate fell 6.5% from year ago levels, and the foreclosure presale inventory rate declined 3.92% month-over-month and 28.4% from last year.

Still, a distressed pipeline lingers in the background. As of June, 3.32 million properties were classified as 30 or more days past due, according to LPS data.

The number of properties 90 days or more delinquent sat at 1.345 million. Homes in the foreclosure pre-sale inventory hovered at 1.458 million.

As of June, the states of Florida, Mississippi, New Jersey, New York and Maine maintained the highest percentage of non-current home loans. The states with the lowest percent of late mortgage payments included Alaska, North Dakota, Montana, South Dakota and Wyoming.

Click here to access the full report.

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