The year 2012 brought a consistent, albeit mild, housing recovery with the nation originating 8.6 million loans last year as the delinquency rate declined 32% from the peak reached in 2010, according to Lender Processing Services.
LPS released its Mortgage Monitor report, noting that a late year drop in foreclosure starts caused the national foreclosure rate to fall 18% to 3.44% in 2012, the lowest reported LPS rate since the summer of 2009.
From a year earlier, the 2012 delinquency rate declined 9.1%, which is a better pace than in 2011 when delinquencies fell by only 6.9%.
But the big story is mortgage originations, LPS said.
"Though still a long way off from the historic level of originations that preceded the mortgage crisis, 2012 was the strongest full year of originations we've seen since 2007," said Herb Blecher, senior vice president of LPS Applied Analytics. "Volumes were up approximately 34% year over year, with about 8.6 million new loans originated. And, while the majority of these new loans were government-backed - 84 percent in 2012 as compared to just over 50 percent at the peak - the trend over the last four years does suggest a slowly resurgent non-agency lending market."
Meanwhile, negative equity in the U.S. declined by 35% from January 2012 through the end of the year, giving four million borrowers who were once locked out of traditional refinancing models a chance to qualify for conforming refi thresholds as their home values appreciated.
Another 3.4 million homeowners are on the cusp of moving to a healthier LTV threshold, where they can more easily qualify for refinancing.
Originations picked up dramatically during the year, with activity levels expanding the most since 2007, which was right before the mortgage market meltdown.
About 2.6 million borrowers are now eligible for HARP refinancings, LPS said. And high LTV originations picked up after March 2012, with the volume averaging about 160,000 loans per month.
The total U.S. loan delinquency rate stands at 7.17%, according to the LPS report. The states with the most non-current loans include Florida, Mississippi, New Jersey, Nevada and New York.
To obtain this information, LPS analyzed performance information on 40 million loans within its repository of loan-level data.