More delinquent loans were cured in February, with 500,000 home loans saved in a single month, Lender Processing Services said Wednesday.
A seasonal uptick in the loan cure rate is not unusual for this time of year, but this time more of the cures were centered around Federal Housing Agency loans.
For LPS, the sharp uptick in this segment suggests the loss mitigation options initiated by FHA in late 2012 are starting to pay off, according to Herb Belcher, senior vice president with LPS.
The FHA continues to support the nation's lower credit borrowers to a much larger degree.
Overall, foreclosure and delinquency rates continue to improve, but the pace of improvement is slowing, with LPS noting that 40% of loans more than 90 days past due have remained in that state for at least a year.
As mortgage rates ticked up, prepayment rates – an indicator of refinance activity – also declined 10% month-over-month in February. Still, Belcher says prepayments are still high when compared to historic standards.
Overall, the total U.S. loan delinquency rate is hovering at 6.80%, although it dipped 3.16% from January to February.
The total U.S. foreclosure pre-sale inventory rate came in at 3.38%, down nearly 1% from a month earlier.
The five states with the highest percentage of non-current loans includes Florida, New Jersey, Mississippi, Nevada and New York.
The list of those with the lowest percentage of delinquent loans includes Montana, Alaska, Wyoming, South Dakota and North Dakota.
Click here to access the full report online.
See Herb Belcher's online video summary of the report here.