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LPS Mortgage Monitor - June 2013


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Data as of June, 2013 Month-end

Data as of June, 2013 Month-end

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  • 1. Lender Processing Services 1 ONESOURCE.POWERFULSOLUTIONS.ONESOURCE.POWERFULSOLUTIONS.:::::::::::::::::::::::::::::::::::::::: LPS Mortgage Monitor July 2013 Mortgage Performance Observations Data as of June, 2013 Month-end
  • 2. Lender Processing Services 2 • Focus 1: Delinquency trend reversal with new problem loan focus • Focus 2: Prepayment activity and refinance opportunities • Focus 3: Judicial vs. non-judicial update and regional resolution rates June 2013 Focus Points
  • 3. Lender Processing Services 3 • Delinquencies jumped almost 10% M/M but the quarterly increase was below average vs. prior years • The increase was broad-based impacting all states and products • Over 700k borrowers who were current in May missed their June payment; payment issues also sent cure rates to 5 year low Focus Point 1: DQ trend reversal with new problem loan focus
  • 4. Lender Processing Services 4 DQs up almost 10% M/M but below average seasonal Q1 to Q2 increase
  • 5. Lender Processing Services 5 Increase in delinquencies was broad based by geography… M/M Change in 30 Day DQ%
  • 6. Lender Processing Services 6 …and also broad based by product type
  • 7. Lender Processing Services 7 Over 700k loans that were current as of May missed their June payment
  • 8. Lender Processing Services 8 Payment issues also impacted cures; early DQ cures fell to 5 year low
  • 9. Lender Processing Services 9 The trend for serious DQs is still down; rate close to pre-crisis average
  • 10. Lender Processing Services 10 • Prepayment rates dropped ~12% with rise in mortgage rates; still above historically similar rate periods • Purchase share of originations has been steadily decreasing • Despite improved equity, fewer loans have refinancible characteristics at new rates; still ~12% of active Focus Point 2: Prepayment activity and refinance opportunities
  • 11. Lender Processing Services 11 Prepayment rates dropped ~12%; still above similar rate period in 2011
  • 12. Lender Processing Services 12 Purchase share of originations has been steadily decreasing
  • 13. Lender Processing Services 13 Fewer loans have refinancible characteristics; still ~12% of active # of Loans with “Refinancible” attributes Dec-2012: 9.4M loans Mar-2013: 8.9M loans “In the Money”: Current Interest Rate >= 5.0%
  • 14. Lender Processing Services 14 • The pace of judicial FC sales has been increasing for 3 yrs; still half non-judicial rate • Foreclosure inventories in judicial states are 26% off their peak vs. 50% in non-judicial • Increases in FC sales have reduced the judicial pipeline ratios (time to clear) • Distressed inventory in the northeast remains close to peak Focus Point 3: Judicial vs. Non update and regional resolution rates
  • 15. Lender Processing Services 15 The pace of judicial FC sales has been steadily increasing for 3 years
  • 16. Lender Processing Services 16 Judicial FC inventory down 26% from peak vs. 50% in non-judicial Non-judicial Peak Dec-10: 2.97% Judicial Peak Jan-12: 6.60%
  • 17. Lender Processing Services 17 Pipeline ratios have declined sharply in judicial states
  • 18. Lender Processing Services 18 Non-current inventory in the Northeast remains close to peak Peak to Jun-13 Change in Non-Current %
  • 19. Lender Processing Services 19 New problem loan rates remain slightly higher in judicial states
  • 20. Lender Processing Services 20 ONESOURCE.POWERFULSOLUTIONS.ONESOURCE.POWERFULSOLUTIONS.:::::::::::::::::::::::::::::::::::::::: LPS Mortgage Monitor June 2013 Appendix Data as of May, 2013 Month-end
  • 21. Lender Processing Services 21 June 2013 Data Summary
  • 22. Lender Processing Services 22 Seven of the top 10 states for total non-current are judicial
  • 23. Lender Processing Services 23 Loan counts and average days delinquent
  • 24. Lender Processing Services 24 ONESOURCE.POWERFULSOLUTIONS.:::::::::::::::::::::::::::::::::::::::: LPS Mortgage Monitor Disclosures: Product / Metric Definitions and July 2012 Market Sizing Revisions
  • 25. Lender Processing Services 25 Disclosure Page: Product Definitions *Conforming limits do not account for temporary or high-cost area increases.
  • 26. Lender Processing Services 26 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.
  • 27. Lender Processing Services 27 With the June 2012 month-end data, LPS has updated its extrapolation methodology to incorporate, among other things, improved estimates of market size, which includes higher 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 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.
  • 28. Lender Processing Services 28 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
  • 29. Lender Processing Services 29 New scaling reflects the higher coverage of government loans and allows for the incorporation of new servicers
  • 30. Lender Processing Services 30 Delinquencies decline based on higher estimated coverage of FHA and subprime loans. Converge due to new servicers and transfer issues with prior scaling
  • 31. Lender Processing Services 31 Foreclosure inventory remains almost identical, but shifts up in recent months as transfer bias is repaired
  • 32. Lender Processing Services 32 Foreclosure starts remain consistent, with rates shifting up slightly
  • 33. Lender Processing Services 33 Performance Statistics Changes: Database Counts
  • 34. Lender Processing Services 34 Performance Statistics Changes: State Level Detail