Foreclosure inventory volume outpacing actual foreclosure sales: LPS
Delinquencies on home loans declined in February as foreclosure inventory levels shot up, suggesting it will take more time to move distressed properties off the market, Lender Processing Services Inc. said in its February Mortgage Monitor. The nation's foreclosure inventory levels are now about 30 times greater than the monthly foreclosure sales volume, LPS concluded. "Ultimately, these foreclosures will most likely reenter the market as REO properties, putting even more downward pressure on U.S. home sales," LPS said. The report on falling delinquencies confirms LPS reports from earlier this month. Another significant shift occurred in February with data showing a 23% hike in Option ARM foreclosures in the past six months. Option ARM foreclosures now make up 18.8% of the foreclosure inventory, outpacing subprime foreclosures. LPS added that deterioration continues in the non-agency prime segment, jumbo and non-agency prime loans. On a positive note, LPS said modification efforts by banks are starting to pay off. Twenty-two percent of loans classified as being delinquent for 90 days or more are now listed as current. Overall, the total U.S. loan delinquency rate stands at 8.8%, while the foreclosure inventory rate sits at 4.15%. States with the most delinquent loans include Florida, Nevada, Mississippi, New Jersey and Georgia. States with the fewest non-current loans are Montana, Wyoming, Alaska, South Dakota and North Dakota. Write to Kerri Panchuk.