The pace of mortgage delinquency slowed in recent months, but the rate remains at an all-time high, threatening the fragile recovery seen so far in the housing market. The total loan delinquency rate of US mortgages is 10.25% as of January 2010 — a 2% increase from December 2009 and a 22.1% increase from January 2009, according to mortgage performance data and analytics provider Lender Processing Services (LPS). Another 3.3% of foreclosure inventory brings the total non-current rate to 13.5% in January. Current loans continue to default at “significant rates” despite the recent slowing trend over the last quarter, LPS said, seen in the cumulative monthly count of current loans as of Dec. 31, 2008 that are now at least 60 days delinquent: About 2.5m loans that were current on Jan. 1, 2009 were 60+ days delinquent and in foreclosure as of Jan. 31, 2010, based on the LPS Applied Analytics’ loan-level database of 40m loan. LPS found 7.5m loans are in delinquency or foreclosure, while an additional 1m properties are in real estate owned (REO) or post-sale foreclosures. “Despite extraordinary loss mitigation efforts that have resulted in the execution of approximately 2m loan modifications – including the federal government’s Home Affordable Modification Program (HAMP) trial periods – the number of new delinquencies since January 1, 2009, still exceeds this number by 25%,” LPS said in its latest report (download here) LPS found that more than 31% of loans that have been delinquent for six months have yet to enter foreclosure proceedings, while 22.8% of loans delinquent for 12 months have yet to endure foreclosure status — up from 9% as of 2008. “The nation’s pool of problem loans continues to grow and stagnate,” LPS said in the report. Older mortgages continue to re-default, putting the average age of newly delinquent loans at 46 months, compared with 27 months in January 2007. During January 2010, 346,000 borrowers became delinquent for the first time — 40% of all newly delinquent loans in the month. Eight states bear foreclosure inventory rates higher than the 3.27% national average. Florida bears an 11.1% foreclosure inventory rate, while Nevada comes in second-highest with 7.2%. New Jersey, Arizona, California Illinois, Indiana and Ohio also have foreclosure inventory rates above 3.27%. Fourteen states bear total non-current rates above the national 13.5% average. Florida leads all states with 23.7% of its loans in non-current status, while Nevada follows close behind t 22.9% and Mississippi claims a close third at 18.4%. Arizona comes in fourth-highest at 16.3%, and California rounds out the top five at 15.1%. Write to Diana Golobay. Disclosure: The author holds no relevant investment positions.