lps mortgage monitor - september 2012

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LPS Mortgage Monitor

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October 2012 Mortgage Performance Observations

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Data as of September, 2012 Month-end

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September 2012 Data DashboardSeptember 2012 Data Dashboard


September 2012 Highlights

• Delinquency Increase – Attributes and

September 2012 Highlights

Delinquency Increase Attributes and causes

• Origination Increase – HARP Activity and OpportunityOpportunity

• Judicial vs. Non-judicial Foreclosures –Pipeline and impact


DQs up 7.7% for the month; largest monthly increase since 2008

Increase came from early stages (Appendix, slide 18):• 30 Day DQs increased from

DQs Down 30% from

Peak

1.37mm to 1.59mm• 90 Day DQs increased from

1.52mm to 1.53mm


First time delinquencies increased by about 200k (in-line with repeats)

16% of current to 30 rolls were re-defaulted modifications vs.

17% in August


Payment / transactional activity was

Number of Business Days

down across the board in SeptemberNumber of Business Days

September:19

August:23

2012 Average (ex Sep): 21.25

• Foreclosure starts -21% M/M (Appendix, slide 20)

( p)

• Foreclosure sales -18% M/M (Appendix, slide 20)

Delinq ent c res 25% M/M (Appendi slide 23)• Delinquent cures -25% M/M (Appendix, slide 23)

• Prepayment rates -13% M/M(Appendix, slide 24)


New problem loan rates maintained seasonal increase in September


Delinquency Increase

• Payment / transaction activity down

Summary PointsPayment / transaction activity down

• Seasonality pressuresN i t b d f d f lt d d• No impact observed from re-defaulted mods

• Longer term trend is still down– One month of activity could be anomaly,

monitoring the longer term trend– Delinquencies 30% lower than Jan-10 peak– Watch delinquency migration and cure rates


next month

August originations at the highest level since 2009


HARP originations still on the riseHARP originations still on the rise


HARP eligible population may still be over 3 million loans

63% of 2005 and63% of 2005 and earlier current and “in the money” loans are

GSEs


HARP Eligible: GSE, Originated pre-5/09, CurrLTV > 80, No missed prior 6 and <= 1 missed in prior 12“In the Money”: Interest Rate > 4.5%

Originations and HARP Increase

• Originations at the highest level since 2009

Summary PointsOriginations at the highest level since 2009 due to persistent low rates and increased HARP activityHARP activity

• There is still a large potential HARP eligible populationpopulation

• Large “in-the-money” market still exists ( t ti l HARP 3 0 fi i ?)(potential HARP 3.0 refinancing?)


FC inventory in judicial states remains almost 3x non-judicial

Seven of the top 10 states for total non-current are judicial

(Appendix, slide 19)


Judicial pipeline ratio is twice non-judicial; several states still extreme


Loss mitigation activity is similar in both judicial and non-judicial states


Judicial vs. Non-judicial FC Disparity

• Large differences persist in judicial and non-

Summary PointsLarge differences persist in judicial and nonjudicial foreclosure timelines and inventory over-hangover hang.

• No associated impacts/divergence noted in other statistics thus far:other statistics thus far:– Similar loss mitigation activity

Si il bl l t– Similar new problem loan rates– Similar origination activity / interest rates


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October 2012 Appendix

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Data as of September, 2012 Month-end

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The September increase in delinquencies impacted early stages


Seven of the top 10 states for total non-current are judicial

Average year over year change in non-current percent


(includes loans 30+ Delinquent or in Foreclosure)Judicial =0.4% Non-judicial =-4.7%

FC starts at lowest since September 2007, Sales 2nd lowest in 19 months


Decline in foreclosure starts supported a drop in overall inventory


First time foreclosure starts at the lowest level since 2008


Cure counts are down sharply for early stage delinquencies


September prepayment rates dropped from August


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Disclosures: Product / Metric Definitions and July 2012 Market Sizing Revisions

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Disclosure Page: Product DefinitionsDisclosure Page: Product Definitions

*Conforming limits do not account for temporary or high-cost area increases.


Disclosure Page: Metrics DefinitionsDisclosure Page: Metrics Definitions

• Total Active Count: All active loans as of month-end including loans in any state of delinquency or foreclosure. Post-sale loans and loans in REO are excluded from the total q yactive count.

• Delinquency Statuses (30, 60, 90+, etc): All delinquency statuses are calculated using the MBA methodology based on the payment due date provided by the servicer. Loans in foreclosure are reported separately and are not included in the MBA days delinquentforeclosure are reported separately and are not included in the MBA days delinquent.

• 90 Day Defaults: Loans that were less than 90 days delinquent in the prior month and were 90 days delinquent, but not in foreclosure, in the current month.

• Foreclosure Inventory: The servicer has referred the loan to an attorney for f l L i i f l i t f f l t lforeclosure. Loans remain in foreclosure inventory from referral to sale.

• Foreclosure Starts – Any active loan that was not in foreclosure in the prior month that moves into foreclosure inventory in the current month.

• Non-Current: Loans in any stage of delinquency or foreclosure.y g q y• Foreclosure Sale / New REO: Any loan that was in foreclosure in the prior month that

moves into post-sale status or is flagged as a foreclosure liquidation.• REO: The loan is in post-sale foreclosure status. Listing status is not a consideration,

this includes all properties on and off the market


this includes all properties on and off the market.• Deterioration Ratio: The ratio of the percentage of loans deteriorating in delinquency

status vs. those improving.

With the June 2012 month-end data LPS has updated itsWith the June 2012 month end data, LPS has updated its extrapolation methodology to incorporate, among other things, improved estimates of market size, which includes hi h f t d b i d t dhigher coverage of government and subprime products and increases LPS’ estimate of the total first lien residential mortgage market by three percent to 50.4 million.

To ensure consistency in trend analysis, the new methodology has been applied to all historical data andmethodology has been applied to all historical data and previously reported mortgage performance statistics have been adjusted accordingly.

The following section contains information on market coverage and comparisons with previously reported


statistics. Additional information is available upon request.

The new scaling increases overall estimated industry loan count by approximately 1.2 million loans

Prior industry estimates declinedPrior industry estimates declined because scaling didn’t support current servicing transfer volumes


New scaling reflects the higher coverage of government loans and allows for the incorporation of new servicers


Delinquencies decline based on higher estimated coverage of FHA and subprime loans.

Converge due to new servicers and transfer issues with prior scaling


Foreclosure inventory remains almost identical, but shifts up in recent months as transfer bias is repaired


Foreclosure starts remain consistent, withrates shifting up slightly


Performance Statistics Changes: Database CountsPerformance Statistics Changes: Database Counts


Performance Statistics Changes: State Level DetailPerformance Statistics Changes: State Level Detail


lps mortgage monitor - september 2012

Real Estate

lender processing services26

lender processing services12

lender processing services19

powelender processing

foreclosure judicial

judicial appendix

judicial statesremains

month of activity