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LPS Mortgage Monitor - November 2012
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LPS Mortgage Monitor - November 2012

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December 2012 Mortgage Performance Observations; Data as of November, 2012 Month-end …

December 2012 Mortgage Performance Observations; Data as of November, 2012 Month-end

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  • 1. WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : LPS Mortgage Monitor December 2012 Mortgage Performance Observations ONS Data as of November, 2012 Month-endONE SOURCE. POW E Lender Processing Services 1
  • 2. November 2012 Focus Points• Focus 1: Foreclosure inventory dropping sharply; y pp g p y; starts remain down due to National Mortgage Settlement (“NMS”)• Focus 2: Origination activity is strong as rates remain near historic lows; HARP activity remains y near historic highs• Focus 3: Large segments of the market can still benefit from both HARP and traditional refinancing opportunities Lender Processing Services 2
  • 3. Focus 1 Summary: Monthly Mortgage Performance• Foreclosure starts remain low due to NMS; associated drop in foreclosure inventory• Delinquencies following typical seasonal trends; lower foreclosures may be masking short term improvement• Delinquencies are up over 15% in Hurricane Sandy impacted regions Lender Processing Services 3
  • 4. Drop in FC starts due to NMS; expect a rebound in coming months Settlement requires 14 day notice to borrowers prior to referral; letters were sent starting in September Lender Processing Services 4
  • 5. FC sales maintained stable nationaltrend while starts dropped sharply Lender Processing Services 5
  • 6. DQs in-line with seasonal trends; FCsdown 10% since Sep due to low starts Drop in foreclosures due to NMS but no discernible increase in delinquencies beyond seasonality Lender Processing Services 6
  • 7. Delinquencies have increased sharply in Hurricane Sandy impacted zips Nat’l Delinquency Rate: 7.12% q y +3.7% since Aug-12 Lender Processing Services 7
  • 8. Focus 2 Summary: Originations and Characteristics• Originations increased in October; expected to decline slightly but remain elevated in November• Newly originated mortgages have payments that are 15% lower than loans paying off• HARP related activity remains near historic highs Lender Processing Services 8
  • 9. October originations increased fromSeptember’s shortened month drop Lender Processing Services 9
  • 10. Loan prepayments remain high; 2% of total balance prepaid or refi’d in Nov Lender Processing Services 10
  • 11. Rates on new loans are about 1.5percentage points below pay-offs Approximately $190 payment difference Lender Processing Services 11
  • 12. High LTV (likely HARP) originationsare still high, but a lower % of total Lender Processing Services 12
  • 13. Focus 3 Summary: Refinance Eligibility• Almost 10 million outstanding mortgages may be eligible for traditional refinancing with an additional 2 6 million possible via 2.6 HARP• Potential payment reduction opportunity exceeds 30% at current market rates d t t k t t Lender Processing Services 13
  • 14. Almost 20% of mortgages have “refinancible” characteristics Modified loans Lender Processing Services 14
  • 15. 50% of the 2.6M loans with HARPeligible attributes have >720 credit 670k loans have >720 credit and over 6 0% 6.0% interest rate*HARP Attributes: 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 15
  • 16. Borrowers could see significant payment reductions if able to refiNew payments calculated based on refinance into 3.75% rate, same term, UPB increases by 1% *HARP Attributes: GSE, Close prior to May-09, Curr LTV >80%, No more than 1 DQ in 12 mos and 0 in 6 mos **Traditional Refinance Attributes: Interest rate > 4.5%, LTV <= 80%, Credit Score >= 720 Lender Processing Services 16
  • 17. ONE SOURCE. POW E ONS WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :Lender Processing Services December 2012 Appendix Data as of November, 2012 Month-end LPS Mortgage Monitor17
  • 18. November 2012 Data Dashboard Lender Processing Services 18
  • 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 = -6.9% Non-judicial = -11.9% Lender Processing Services 19
  • 20. Drop in foreclosure starts supported a drop in overall inventory Lender Processing Services 20
  • 21. WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : LPS Mortgage Monitor Disclosures: Product / Metric Definitions and ONS July 2012 Market Sizing RevisionsONE SOURCE. POW E Lender Processing Services 21
  • 22. Disclosure Page: Product Definitions *Conforming limits do not account for temporary or high-cost area increases. Lender Processing Services 22
  • 23. 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 23
  • 24. 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 24
  • 25. 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 25
  • 26. New scaling reflects the higher coverage of governmentloans and allows for the incorporation of new servicers Lender Processing Services 26
  • 27. 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 27
  • 28. Foreclosure inventory remains almost identical, butshifts up in recent months as transfer bias is repaired Lender Processing Services 28
  • 29. Foreclosure starts remain consistent, with rates shifting up slightly Lender Processing Services 29
  • 30. Performance Statistics Changes: Database Counts Lender Processing Services 30
  • 31. Performance Statistics Changes: State Level Detail Lender Processing Services 31

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