Jacksonville, FL, July 9, 2013 -- The national mortgage delinquency rate continued to fall in May, marking the largest year-to-date drop since 2002, according to the May Mortgage Monitor report released by Lender Processing Services.
Delinquencies are down more than 15% since the end of December 2012, coming in at 6.08% for the month. As LPS Applied Analytics Senior Vice President Herb Blecher explained, much of this improvement is supported by the fact that new problem loan rates are approaching the pre-crisis average.
“Though they are still approximately 1.4 times what they were, on average, during the 1995 to 2005 period, delinquencies have come down significantly from their January 2010 peak,” Blecher said.
“In large part, this is due to the continuing decline in new problem loans -- as fewer problem loans are coming into the system, the existing inventories are working their way through the pipeline. New problem loan rates are now at just 0.73%, which is right about on par with the annual averages during 2005 and 2006, and extremely close to the 0.55% average for the 2000-2004 period preceding.
Blecher added that negative equity appears to still be one of the strongest drivers of new problem loans, and rising home prices are helping that situation to improve.
"We looked once again at the number of ‘underwater’ loans in the U.S., and found that the total share of mortgages with LTVs of greater than 100% had declined to just 7.3 million loans as of the end of the first quarter of 2013. This accounts for less than 15% of all currently active loans and represents a nearly 50% year-over-year decline.”