Good News On The Mortgage Front

Delinquencies are declining - The housing market continues to recover from post-meltdown levels with mortgage delinquencies down 43% from 2010 levels, LPS (Lender Processing Services Applied Analytics) reported this week.
Fewer underwater - The number of borrowers who remain underwater – or who owe more on their homes than their current worth – also fell a sharp 47% from Q1 2012 to Q1 2013, LPS said in its Mortgage Monitor Report.
Underwater borrowers now account for 14.7% of all active loans studied by the mortgage analytics platform, LPS explained.
High LTVs on the decline - Homeowners carrying high loan-to-value ratios also are on the decline. That figure now sits at 7.3 million mortgages, with borrowers benefitting from rising home prices. Even the troubled ‘sand states,’ which took a deep hit during the recession, have fewer underwater homeowners. The percentage of mortgages that are underwater fell in Arizona from 53% to 18.1% y/y. California’s rate declined from 51% to 15.6%, while Nevada experienced a percentage drop from 49% to 32%.
Side Note: In 2011, 17M homeowners had LTVs greater than 100%, 10M more than today.
Overall, the loan delinquency rate is floating at 6.08% down 2.11% from the prior month. The pre-sale foreclosure inventory rate sits at 3.05%, down 3.91%.
“As we’ve noted before, negative equity appears to still be one of the strongest drivers of new problem loans, and — primarily buoyed by home price increases nationwide — that situation also continues to improve,” said Herb Belcher, LPS’ SVP.
“We looked once again at the number of ‘underwater’ loans in the U.S., and found that the total share of mortgages with LTVs of greater than 100%had declined to just 7.3M loans as of the end of the first quarter of 2013. This accounts for less than 15% of all currently active loans and represents a nearly 50% y/y decline,” Belcher explained.

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