LPS Mortgage Monitor - December 2012

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January 2013 Mortgage Performance Observations; Data as of December, 2012 Month-end

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LPS Mortgage Monitor - December 2012

  1. 1. WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : LPS Mortgage Monitor January 2013 Mortgage Performance Observations ONS Data as of December, 2012 Month-endONE SOURCE. POW E Lender Processing Services 1
  2. 2. January 2013 Focus Points• Focus 1: CFPB’s “Qualified Mortgage”, Refi and g g , HARP Update• Focus 2: National Mortgage Settlement (NMS) and CFPB Servicing Guidelines - Foreclosure Impact• Focus 3: Negative equity improvement• Focus 4: 2012 in Review Lender Processing Services 2
  3. 3. Focus Point 1: CFPB’s Qualified Mortgage (“QM”) and Refi Update• QM would have restricted at least 23% of 2005 originations; limited impact today• “Refinancible” loan population continues to Refinancible grow, even as new originations rise• HARP originations still strong Lender Processing Services 3
  4. 4. At least 2% of 2012 originations would be non-QM vs. 23% in 2005* 16% of GSE loans originated in 2012 would not otherwise be QM *Estimate based on product type (IO, Option ARM), documentation and term; does not account for points, fees or DTI criteria Lender Processing Services 4
  5. 5. Almost 20% of mortgages have “refinancible” characteristics In Dec 2011, 7.2M loans ec 0 , oa s met “refinancible” criteria, with approx 5.5M refis since Lender Processing Services 5
  6. 6. High LTV (likely HARP) originations are still strong An additional 2.6M loans may be eligible* * % of all High LTV orig CA: 13% FL: 8.3% IL: 5.8% MI: 5.5% 5 8% 5 5% GA: 5.2% AZ: 4.7%*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 6
  7. 7. Focus 2 Summary: Foreclosure Activity - NMS and CFPB Rules• Foreclosure starts increasing but still increasing, impacted by NMS• CFPB Servicing Guidelines – No FC starts prior to 120 day delinquency – R t i t d d l t ki Restricted dual-tracking – No FC sale until “all other alternatives” considered id d• Foreclosure sale drop; in-line with historic Q4 seasonal d li l decline Lender Processing Services 7
  8. 8. Foreclosure starts are slowlyincreasing after referral letters Settlement requires 14 day notice to borrowers prior to referral; letters were sent starting in September Lender Processing Services 8
  9. 9. Almost 30% of starts in 2012 were prior to 120 day delinquency In 2012, an average of 49k loans per month had foreclosure initiated prior to the new CFPB guidelines Lender Processing Services 9
  10. 10. FC sales are at the lowest level since March of 2009 Lender Processing Services 10
  11. 11. Focus 3 Summary: Negative Equity• Improving equity situation continues to create new refinance opportunities• Negative equity down 35% since the start of 2012• “Sand states” still have high rates of underwater loans Lender Processing Services 11
  12. 12. Almost 4M loans with non-conforming LTVs last year may qualify today 3.4 3 4 million loans are on the cusp of the conforming LTV threshold Lender Processing Services 12
  13. 13. Negative equity is down 35% since January 2012 Lender Processing Services 13
  14. 14. “Sand states” have high rates ofunderwater and new problem loans NV: 49% FL: 39% AZ: 26% CA: 24% Lender Processing Services 14
  15. 15. Focus 4 Summary: 2012 Review• Delinquencies continued to improve down improve, 32% from January 2010 peak• Following regional improvement, foreclosures began t d li nationally f l b to decline ti ll• Originations up 34% year over year; p primarily government backed yg Lender Processing Services 15
  16. 16. DQ improvement has continued; FCs just starting to drop DQ DQ YoY FC YoY % Change % Change1995-2005 4.32% -0.5% 0.53% 0.4%Dec-2009 10.32% +21.0% 3.74% +64.3%Dec-2010 8.47% -17.9% 4.22% +13.0%Dec-2011 7.89% -6.9% 4.20% -0.6%Dec-2012 7.17% -9.1% 3.44% -18.0% Lender Processing Services 16
  17. 17. Strongest full year originations since2007; 84% gov’t today vs. 69% in ‘07 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 17
  18. 18. ONE SOURCE. POW E ONS WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :Lender Processing Services January 2013 Appendix Data as of December, 2012 Month-end LPS Mortgage Monitor18
  19. 19. December 2012 Data Dashboard Lender Processing Services 19
  20. 20. 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 20
  21. 21. Delinquencies remain elevated forSandy Affected Areas in NJ and CT Lender Processing Services 21
  22. 22. New Problem loans are on decline innon-judicial, stable in judicial states Lender Processing Services 22
  23. 23. Foreclosure to 90+ counts are lowest in over a year Lender Processing Services 23
  24. 24. WERFUL SOLUTIO . : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : LPS Mortgage Monitor Disclosures: Product / Metric Definitions and ONS July 2012 Market Sizing RevisionsONE SOURCE. POW E Lender Processing Services 24
  25. 25. Disclosure Page: Product Definitions *Conforming limits do not account for temporary or high-cost area increases. Lender Processing Services 25
  26. 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 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 26
  27. 27. 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 27
  28. 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 Lender Processing Services 28
  29. 29. New scaling reflects the higher coverage of governmentloans and allows for the incorporation of new servicers Lender Processing Services 29
  30. 30. 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 30
  31. 31. Foreclosure inventory remains almost identical, butshifts up in recent months as transfer bias is repaired Lender Processing Services 31
  32. 32. Foreclosure starts remain consistent, with rates shifting up slightly Lender Processing Services 32
  33. 33. Performance Statistics Changes: Database Counts Lender Processing Services 33
  34. 34. Performance Statistics Changes: State Level Detail Lender Processing Services 34

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