The number of re-performing/modified loans continues to grow as nonperforming loans continue to shrink, according to figures reported by Amherst Securities in a report on the private label RMBS sector.
The nonperforming PLUS re-performing bucket declined to $595 billion in November, which represents a 1.6% drop over the last six months.
In November, the amount of new re-performers was $13.6 billion, with $12.1 billion of existing re-performers re-defauling. This grew the re-performing bucket by 0.4%, according to Amherst analysts.
"The re-performing bucket was growing as fast as 9.9%/month in April, the slowing growth of the amount of reperforming loans highlights the continued winding down of loan modification activity," they said in the report.
The distressed pipeline of NPLs shrank to $413 billion from $415 billion. Amherst found that as fewer loans are moving into the NPL bucket via default ($20.0 billion, including first-time defaults of $7.9 billion PLUS re-defaults of $12.1 billion) than are moving out of the NPL bucket by either liquidation or by modification (reached $22 billion, including liquidations of $8.4 billion plus an increase in the re-performing bucket of $13.6 billion).
"We are continuing to see the downward trend in liquidations, and, with foreclosure-gate, we expect this downward trend to continue," Amherst analysts said. "This is the first full month of data since moratoria were announced."
Liquidations totaled $13.0 billion in December 2009, $11.4 billion in June 2010, averaged $9.2 billion over September/October 2010, and were $8.4 billion in November. According to Amherst, at the current liquidation rates, it will take approximately 49 months to clear the current nonperforming private label population.