LPS Mortgage Monitor - July 2013

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Data as of July, 2013 Month-end

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LPS Mortgage Monitor - July 2013

  1. 1. Lender Processing Services 1 ONESOURCE.POWERFULSOLUTIONS.ONESOURCE.POWERFULSOLUTIONS.:::::::::::::::::::::::::::::::::::::::: LPS Mortgage Monitor August 2013 Mortgage Performance Observations Data as of July, 2013 Month-end
  2. 2. Lender Processing Services 2 • Focus 1: Prepayment activity and origination update • Focus 2: Performance by origination year and product • Focus 3: Delinquency and foreclosure update with product focus • Focus 4: Property sales with traditional vs. distressed break-out July 2013 Focus Points
  3. 3. Lender Processing Services 3 • Prepayment activity remained strong through July with rates up almost 100 basis points since May • Prepayment activity in higher LTV cohorts increased in July • Loan originations had their strongest 12 month period since 2007 Focus Point 1: Prepayment activity and origination update
  4. 4. Lender Processing Services 4 Prepayment activity remained strong through July; rates +80 bps since May
  5. 5. Lender Processing Services 5 Prepayment activity in “HARP-able” LTVs increased in July
  6. 6. Lender Processing Services 6 Loan originations had their strongest 12 month period since 2007
  7. 7. Lender Processing Services 7 • Early payment defaults for 2013 vintage are the best on record • Delinquencies at 12 months of age are a fraction of pre-crisis vintages • Likely HARP delinquencies are lower than pre-crisis GSE and post-crisis FHA (still 3x that of “traditional” GSE). Focus Point 2: Performance by origination year and product
  8. 8. Lender Processing Services 8 Early payment defaults for 2013 vintage (so far) are the best on record
  9. 9. Lender Processing Services 9 Delinquencies at 12 months of age are a fraction of pre-crisis vintages
  10. 10. Lender Processing Services 10 Likely HARP DQs are better than pre- crisis GSE and post-crisis FHA High LTV GSE loans have delinquencies 3x that of “traditional” GSE loans (0.4% vs. 1.2%)
  11. 11. Lender Processing Services 11 • The strong downward trend in delinquencies and foreclosures continues • Foreclosure starts year to date were the lowest since 2007; almost 50% are repeats • Delinquency and foreclosure improvement extends across virtually all products • Over one-third of the delinquent market is Alt-A and Subprime Focus Point 3: Delinquency and foreclosure update with product focus
  12. 12. Lender Processing Services 12 The strong downward trend in DQs and FCs continues
  13. 13. Lender Processing Services 13 YTD FC starts lowest since 2007; almost 50% are repeats
  14. 14. Lender Processing Services 14 DQ, FC improvement extends across virtually all products
  15. 15. Lender Processing Services 15 Over one-third of the delinquent market is Alt-A and Subprime
  16. 16. Lender Processing Services 16 • Short sales, as well as overall distressed sales, were down in 2013 • “Sand” states still have among the highest percentage of distressed sales • Distressed sales volumes do not appear indicative of regional price discounts Focus Point 4: Home prices and distressed sales transactions
  17. 17. Lender Processing Services 17 Short sales, as well as overall distressed sales, were down in 2013 Distressed sales (through Q2) 2011 692k (14% SS) 2012 650k (16% SS) 2013 463k (10% SS)
  18. 18. Lender Processing Services 18 “Sand” states still have among the highest % of distressed sales
  19. 19. Lender Processing Services 19 Distressed sales volumes are not indicative of regional price discounts
  20. 20. Lender Processing Services 20 ONESOURCE.POWERFULSOLUTIONS.ONESOURCE.POWERFULSOLUTIONS.:::::::::::::::::::::::::::::::::::::::: LPS Mortgage Monitor August 2013 Appendix Data as of July, 2013 Month-end
  21. 21. Lender Processing Services 21 July 2013 Data Summary
  22. 22. Lender Processing Services 22 Seven of the top 10 states for total non-current are judicial
  23. 23. Lender Processing Services 23 Loan counts and average days delinquent
  24. 24. Lender Processing Services 24 ONESOURCE.POWERFULSOLUTIONS.:::::::::::::::::::::::::::::::::::::::: LPS Mortgage Monitor Disclosures: Product / Metric Definitions and July 2012 Market Sizing Revisions
  25. 25. Lender Processing Services 25 Disclosure Page: Product Definitions *Conforming limits do not account for temporary or high-cost area increases.
  26. 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. 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. 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. 29. Lender Processing Services 29 New scaling reflects the higher coverage of government loans and allows for the incorporation of new servicers
  30. 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. 31. Lender Processing Services 31 Foreclosure inventory remains almost identical, but shifts up in recent months as transfer bias is repaired
  32. 32. Lender Processing Services 32 Foreclosure starts remain consistent, with rates shifting up slightly
  33. 33. Lender Processing Services 33 Performance Statistics Changes: Database Counts
  34. 34. Lender Processing Services 34 Performance Statistics Changes: State Level Detail

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