LPS Mortgage Monitor - September 2012

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October 2012 Mortgage Performance Observations
Data as of September, 2012 Month-end

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LPS Mortgage Monitor - September 2012

  1. 1. WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : LPS Mortgage Monitor October 2012 Mortgage Performance Observations ONS Data as of September, 2012 Month-endONE SOURCE. POW E Lender Processing Services 1
  2. 2. September 2012 Data Dashboard Lender Processing Services 2
  3. 3. September 2012 Highlights• Delinquency Increase – Attributes and causes• Origination Increase – HARP Activity and Opportunity• Judicial vs. Non-judicial Foreclosures – Pipeline and impact Lender Processing Services 3
  4. 4. DQs up 7.7% for the month; largest monthly increase since 2008 DQs Down Increase came from early stages 30% from (Appendix, slide 18): Peak • 30 Day DQs increased from 1.37mm to 1.59mm • 90 Day DQs increased from 1.52mm to 1.53mm Lender Processing Services 4
  5. 5. First time delinquencies increasedby about 200k (in-line with repeats) 16% of current to 30 rolls were re-defaulted modifications vs. 17% in August Lender Processing Services 5
  6. 6. Payment / transactional activity wasdown across the board in SeptemberNumber of Business Days September: August: 2012 Average 19 23 ( (ex Sep): 21.25 p)• Foreclosure starts -21% M/M (Appendix, slide 20)• Foreclosure sales -18% M/M (Appendix, slide 20)• Delinq ent c res -25% M/M (Appendi slide 23) Delinquent cures 25% (Appendix,• Prepayment rates -13% M/M(Appendix, slide 24) Lender Processing Services 6
  7. 7. New problem loan rates maintained seasonal increase in September Lender Processing Services 7
  8. 8. Delinquency Increase Summary Points• Payment / transaction activity down• Seasonality pressures• No i N impact observed f t b d from re-defaulted mods d f lt d d• 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 Lender Processing Services 8
  9. 9. August originations at the highest level since 2009 Lender Processing Services 9
  10. 10. HARP originations still on the rise Lender Processing Services 10
  11. 11. HARP eligible population may still be over 3 million loans 63% of 2005 and earlier current and “in the money” loans are GSEsHARP 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% Lender Processing Services 11
  12. 12. Originations and HARP Increase Summary Points• Originations at the highest level since 2009 due to persistent low rates and increased HARP activity• There is still a large potential HARP eligible population• Large “in-the-money” market still exists (potential ( t ti l HARP 3 0 refinancing?) 3.0 fi i ?) Lender Processing Services 12
  13. 13. FC inventory in judicial states remains almost 3x non-judicialSeven of the top 10 states for total non-current are judicial (Appendix, slide 19) Lender Processing Services 13
  14. 14. Judicial pipeline ratio is twice non-judicial; several states still extreme Lender Processing Services 14
  15. 15. Loss mitigation activity is similar inboth judicial and non-judicial states Lender Processing Services 15
  16. 16. Judicial vs. Non-judicial FC Disparity Summary Points• Large differences persist in judicial and non- non judicial foreclosure timelines and inventory over hang. over-hang• No associated impacts/divergence noted in other statistics thus far: – Similar loss mitigation activity – Si il new problem l Similar bl loan ratest – Similar origination activity / interest rates Lender Processing Services 16
  17. 17. ONE SOURCE. POW E ONS WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :Lender Processing Services October 2012 Appendix Data as of September, 2012 Month-end LPS Mortgage Monitor17
  18. 18. The September increase indelinquencies impacted early stages Lender Processing Services 18
  19. 19. 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% Lender Processing Services 19
  20. 20. FC starts at lowest since September2007, Sales 2nd lowest in 19 months Lender Processing Services 20
  21. 21. Decline in foreclosure startssupported a drop in overall inventory Lender Processing Services 21
  22. 22. First time foreclosure starts at the lowest level since 2008 Lender Processing Services 22
  23. 23. Cure counts are down sharplyfor early stage delinquencies Lender Processing Services 23
  24. 24. September prepayment rates dropped from August Lender Processing Services 24
  25. 25. WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : LPS Mortgage Monitor Disclosures: Product / Metric Definitions and ONS July 2012 Market Sizing RevisionsONE SOURCE. POW E Lender Processing Services 25
  26. 26. Disclosure Page: Product Definitions *Conforming limits do not account for temporary or high-cost area increases. Lender Processing Services 26
  27. 27. Disclosure 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 y active 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 delinquent 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 foreclosure. L f l Loans remain i f i in foreclosure i l inventory f t from referral t sale. f l to l• 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 market.• Deterioration Ratio: The ratio of the percentage of loans deteriorating in delinquency status vs. those improving. Lender Processing Services 27
  28. 28. With the June 2012 month-end data LPS has updated its month end data,extrapolation methodology to incorporate, among otherthings, improved estimates of market size, which includeshigherhi h coverage of government and subprime products and f t d b i d t dincreases LPS’ estimate of the total first lien residentialmortgage market by three percent to 50.4 million.To ensure consistency in trend analysis, the newmethodology has been applied to all historical data andpreviously reported mortgage performance statistics havebeen adjusted accordingly.The following section contains information on marketcoverage and comparisons with previously reportedstatistics. Additional information is available upon request. Lender Processing Services 28
  29. 29. The new scaling increases overall estimated industry loan count by approximately 1.2 million loans Prior industry estimates declined because scaling didn’t support current servicing transfer volumes Lender Processing Services 29
  30. 30. New scaling reflects the higher coverage of governmentloans and allows for the incorporation of new servicers Lender Processing Services 30
  31. 31. Delinquencies decline based on higherestimated coverage of FHA and subprime loans. Converge due to new servicers and transfer issues with prior scaling Lender Processing Services 31
  32. 32. Foreclosure inventory remains almost identical, butshifts up in recent months as transfer bias is repaired Lender Processing Services 32
  33. 33. Foreclosure starts remain consistent, with rates shifting up slightly Lender Processing Services 33
  34. 34. Performance Statistics Changes: Database Counts Lender Processing Services 34
  35. 35. Performance Statistics Changes: State Level Detail Lender Processing Services 35

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