ONE SOURCE. POWERFUL SOLUTIONS. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :           ...
February 2013 Focus Points• Focus 1: Foreclosure pipeline status and  update on regional activity• Focus 2: New problem lo...
Focus Point 1: Foreclosure pipelinestatus and update on regional activity• Foreclosure starts and sales driven by  regiona...
FC starts & sales remain volatile dueto regional processes and compliance                                                 ...
Significant pipeline differences linger   based on foreclosure process Foreclosure inventory  > 2 years past due     Judic...
Status of 2,164k foreclosures from           January 2012                                          •Two-thirds of current ...
Default pipeline “time to clear” is still     extreme in several states  MA was 75    NV was 27    months       months   i...
Some non-judicial state pipelines aregrowing due to legal or judicial action      NV Assembly Bill 284                    ...
Focus Point 2: New problem loan         rates and attributes• New problem loan rates are still high in  regions with large...
“Sand states” still have high rates of underwater and new problem loans                                                   ...
New problem loan rates declining innon-judicial states; stable in judicial               Lender Processing Services   11
The majority of new problem loans   are from “bubble” vintages            Lender Processing Services   12
Focus Point 3: Loan origination     volumes and characteristics• Originations remain elevated in December  but have not mo...
Originations remain relatively high but signs of “burn-out” persist          2005    2006    2007    2008     2009      20...
Credit standards have increased forall product; limited availability < 700               Lender Processing Services   15
Mortgage originations have        lower risk with higher margins Average Origination Characteristics               Origina...
Focus Point 4: HARP activity andperformance, “refinancibility” update• HARP volumes remain strong; almost a  quarter of al...
HARP activity remains strong, ~30% of GSE originations (22% of total)                 % of all High LTV orig              ...
Likely HARP originations* haveexperienced relatively low defaults                          Credit                 LTV     ...
Almost 20% of mortgages have    “refinancible” characteristics                                                            ...
ONE SOURCE. POWERFUL SOLUTIONS. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :Lender Proc...
January 2013 Data Dashboard          Lender Processing Services   22
Seven of the top 10 states for total    non-current are judicial    Average year over year change in non-current percent  ...
Delinquency and foreclosure rates       continue to improve            Lender Processing Services   24
ONE SOURCE. POWERFUL SOLUTIONS. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :           ...
Disclosure Page: Product Definitions            *Conforming limits do not account for temporary or high-cost area         ...
Disclosure Page: Metrics Definitions•   Total Active Count: All active loans as of month-end including loans in any state ...
With the June 2012 month-end data, LPS has updated itsextrapolation methodology to incorporate, among otherthings, improve...
The new scaling increases overall estimated industry   loan count by approximately 1.2 million loans                      ...
New scaling reflects the higher coverage of governmentloans and allows for the incorporation of new servicers             ...
Delinquencies decline based on higherestimated coverage of FHA and subprime loans.     Converge due to new     servicers a...
Foreclosure inventory remains almost identical, butshifts up in recent months as transfer bias is repaired                ...
Foreclosure starts remain consistent, with        rates shifting up slightly               Lender Processing Services    33
Performance Statistics Changes: Database Counts                  Lender Processing Services      34
Performance Statistics Changes: State Level Detail                   Lender Processing Services        35
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LPS Mortgage Monitor - January 2013

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February 2013 Mortgage Performance Observations; Data as of January, 2013 Month-end

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LPS Mortgage Monitor - January 2013

  1. 1. ONE SOURCE. POWERFUL SOLUTIONS. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : LPS Mortgage Monitor February 2013 Mortgage Performance Observations Data as of January, 2013 Month-end Lender Processing Services 1
  2. 2. February 2013 Focus Points• Focus 1: Foreclosure pipeline status and update on regional activity• Focus 2: New problem loan rates and attributes• Focus 3: Loan origination volumes and characteristics• Focus 4: HARP activity and performance, “refinancibility” update Lender Processing Services 2
  3. 3. Focus Point 1: Foreclosure pipelinestatus and update on regional activity• Foreclosure starts and sales driven by regional processes and compliance; starts increasing after NMS• “Time to clear” still multi-year; 42% of loans in foreclosure last year remain in foreclosure• NV and MA pipeline ratios are extending as “judicial”-like processes are implemented (preview of HOBR in CA?) Lender Processing Services 3
  4. 4. FC starts & sales remain volatile dueto regional processes and compliance National Mortgage Settlmt. Process Reviews FHFA Moratoria Lender Processing Services 4
  5. 5. Significant pipeline differences linger based on foreclosure process Foreclosure inventory > 2 years past due Judicial: 58% Non-judicial: 33% Foreclosure sale rates in non-judicial states are over 2x judicial Foreclosure inventory in judicial states is 3x non-judicial Lender Processing Services 5
  6. 6. Status of 2,164k foreclosures from January 2012 •Two-thirds of current loans have been modified •17% of delinquent Loans have been modified Lender Processing Services 6
  7. 7. Default pipeline “time to clear” is still extreme in several states MA was 75 NV was 27 months months in Jun-12 in Jan-12 Lender Processing Services 7
  8. 8. Some non-judicial state pipelines aregrowing due to legal or judicial action NV Assembly Bill 284 Eaton v. FNMA: requires affidavit prior to Lenders have to prove foreclosure ownership at FC sale with mortgage and note Lender Processing Services 8
  9. 9. Focus Point 2: New problem loan rates and attributes• New problem loan rates are still high in regions with large numbers of underwater borrowers• Judicial states have experienced consistently higher rates of new problem loans over the past six months• 2005-2007 vintages are the primary source of new problem loans Lender Processing Services 9
  10. 10. “Sand states” still have high rates of underwater and new problem loans NV: 45% FL: 36% AZ: 24% CA: 21% Lender Processing Services 10
  11. 11. New problem loan rates declining innon-judicial states; stable in judicial Lender Processing Services 11
  12. 12. The majority of new problem loans are from “bubble” vintages Lender Processing Services 12
  13. 13. Focus Point 3: Loan origination volumes and characteristics• Originations remain elevated in December but have not moved significantly higher despite continued rate declines• Credit characteristics for recent vintages are pristine with very low default rates• Today’s originations have lower risk with higher margins Lender Processing Services 13
  14. 14. Originations remain relatively high but signs of “burn-out” persist 2005 2006 2007 2008 2009 2010 2011 2012 Count 13.1M 11.2M 9.1M 6.7M 8.3M 7.2M 6.4M 8.6M % Gov 52% 52% 69% 87% 91% 89% 87% 84% Lender Processing Services 14
  15. 15. Credit standards have increased forall product; limited availability < 700 Lender Processing Services 15
  16. 16. Mortgage originations have lower risk with higher margins Average Origination Characteristics Original Non- Spread to CreditVintage Loan-to- current at Libor 10yr Score Value 12th pmt Swaps (bp) 2005 705 74.6% 4.8% 119 Bubble-era loans 2006 699 76.7% 8.7% 106 were risky and 2007 705 77.3% 9.2% 102 margins were tight 2008 716 77.8% 7.4% 176 2009 737 75.6% 2.9% 158 Today, loans have 2010 743 75.0% 2.0% 148 better credit and 2011 745 74.4% 1.7% 164 return almost 100bp more 2012 747 75.1% 1.5% 199 Lender Processing Services 16
  17. 17. Focus Point 4: HARP activity andperformance, “refinancibility” update• HARP volumes remain strong; almost a quarter of all originations• Default rates for HARP are very low compared to FHA and other high LTV• Significant HARP as well as traditional refi opportunities remain Lender Processing Services 17
  18. 18. HARP activity remains strong, ~30% of GSE originations (22% of total) % of all High LTV orig CA: 13% FL: 8.3% IL: 5.8% MI: 5.5% GA: 5.2% AZ: 4.7% Lender Processing Services 18
  19. 19. Likely HARP originations* haveexperienced relatively low defaults Credit LTV Score Balance FHA/VA 90% 714 $191k High LTV GSE 103% 745 $206k Other GSE 63% 766 $216k Total non-current % for high LTV loans not backed by GSE or FHA is 25% at 12 months *GSE loans with greater than 80% Original LTV Lender Processing Services 19
  20. 20. Almost 20% of mortgages have “refinancible” characteristics An additional 2.6M loans may be eligible for HARP**HARP Eligibility: GSE, Close prior to May-09, Curr LTV >80%, No more than 1 DQ in 12 mos and 0 in 6 mos Lender Processing Services 20
  21. 21. ONE SOURCE. POWERFUL SOLUTIONS. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :Lender Processing Services February 2013 Appendix Data as of January, 2013 Month-end LPS Mortgage Monitor21
  22. 22. January 2013 Data Dashboard Lender Processing Services 22
  23. 23. 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 = -7.0% Non-judicial = -11.8% Lender Processing Services 23
  24. 24. Delinquency and foreclosure rates continue to improve Lender Processing Services 24
  25. 25. ONE SOURCE. POWERFUL SOLUTIONS. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : LPS Mortgage Monitor Disclosures: Product / Metric Definitions and July 2012 Market Sizing Revisions 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 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.• 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. 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.• 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.• 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 itsextrapolation methodology to incorporate, among otherthings, improved estimates of market size, which includeshigher coverage of government and subprime products andincreases 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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