New data from Lender Processing Services challenges the notion that judicial foreclosure states are seeing little improvement in the movement of distressed properties.

In fact, the month of April was a bright spot with the foreclosure sales rate in judicial foreclosure states growing nearly 17% from March to April – the highest sales rate since the foreclosure moratoria hit in the fall of 2010 due to concerns over robo-signing, LPS said in its April Mortgage Monitor.

Despite this notable improvement, Herb Blecher, senior vice president for LPS Applied Analytics, says foreclosure inventories in judicial states remain more than three times the size of those in non-judicial states. National inventory levels are still seven times higher than pre-crisis supply levels, he added.

But the market is not immune to ongoing shifts in inventory levels.

"[R]ecently announced moratoria will need to be monitored to determine the impact on timelines, as well as the rate of the improvement trend," Blecher added.

But the trends in housing overall are promising when analyzing LPS data.

Prepayment speeds – a sign of refinance activity – stayed elevated with interest rates rising, but still near record lows.

Prepay speeds are down from records highs, but today's elevated levels still show significant enough refinancing activity.

Loan vintages from 2009 and earlier are experiencing historically high prepayment speeds with borrowers now selling their homes as prices rise. Other homeowners are refinancing through the government’s Home Affordable Refinance Program.

Prepayment speeds for individuals with lower credit scores (under 720) increased 20% to 30% year-over-year, while those with 720 and above scores saw a more mild, but still significant 7% increase in prepay speeds.

LPS believes this shows lower credit quality borrowers are more liquid than in year’s past.

And while many are calling for a refinancing burnout, LPS said some 9 million American homeowners could still benefit from refinancing, representing roughly 18% of outstanding loans with characteristics favorable to refinancing.

Delinquencies in the first four months of the year dropped the most – 13.4% – since 2004.

The total U.S. loan delinquency rate hit 6.21% in the April report, falling 5.81% month-over-month.

The total foreclosure pre-sale inventory rate also declined 5.83% from the last report, reaching 3.17% in April.