Lender Processing Services (LPS), Jacksonville, Fla., reported that by the end of October 2010 the total U.S. foreclosure inventory rate reached 3.92%, marking an all time high in the size of the inventory — which now equals 7.4 times the historical averages and continues to rise.
Drawing on loan-level residential mortgage information from nearly 40 million loans across the spectrum of credit products the LPS October Mortgage Monitor report showed that the main reason behind the increase is "accelerated foreclosure referral activity over the last several months."
There is an improvement in the monthly rate. But even though in October only 263,000 loans entered the foreclosure process, declining 4.4% month-over-month, the total inventory of foreclosures is nearly 2.1 million loans while another 2.2 million loans are seriously delinquent or over 90-days past due, but not yet in foreclosure status.
When including a loan delinquency rate of 9.29% the total U.S. non-current loan rate that combines foreclosures and delinquencies as a percent of active loans to 13.20%.
More than anything "the widespread moratoria" further extended the average number of days past delinquent for loans in the foreclosure process which now approaches 500 days.
Foreclosure activity changes include increases in the number of loans 6-to-12-month delinquent.
However, as more of these loans are moving to foreclosure the number of loans that are extremely delinquent or over 12 months past due "continues to grow and age" but still are not in foreclosure.
LPS reports that currently a payment has not been made in more than year on almost one-third of all loans that are 90 or more days delinquent. Another 18% are seriously delinquent loans also still not in foreclosure that have not made a payment in two years.
And it is not yet clear as to when these loans will enter the foreclosure inventory.
At the same time the overall percentage of loans moving from the foreclosure process to bank-owned status "or other involuntary liquidation" dropped by 35% in October.
In addition, moratoria caused a dramatic decrease in foreclosure sales over the last month.
Meanwhile delinquencies remain elevated in part due to new 60-day delinquencies that are re-defaults on loans that had previously been 60-days or more delinquent, and had become current.
The number of newly delinquent or "first-time" troubled loans, on the other hand, "remained relatively stable during the last several months.
The highest delinquency rates are reported in Florida, Nevada, Mississippi, Georgia, and Louisiana.