U.S. Foreclosure Inventories at all Time Highs in October, 740% Above Historical Averages and Rising

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According to the October Mortgage Monitor Report released this week by Lender Processing Services (NYSE: LPS), shows that accelerated foreclosure referral activity over the last several months has pushed the foreclosure inventory rate to all-time highs. As of the end of October 2010, foreclosure inventories are 7.4 times historical averages and rising.

The report also shows that foreclosure sales decreased dramatically over the last month as a result of the widespread moratoria. Overall, the percentage of loans moving from the foreclosure process to bank-owned status (or other involuntary liquidation) dropped by 35% in October. The moratoria contributed to further timeline extensions, as the average number of days past delinquent for loans in the foreclosure process approaches 500.

As foreclosure activity increases, more 6- and 12-month delinquent loans are moving to foreclosure, but the extremely delinquent category (more than 12 months) continues to grow and age. A payment has not been made in more than year on almost one-third of all loans that are 90 or more days delinquent. And, of loans that have not made a payment in two years, more than 18% are still not in foreclosure.

In the month of October, 263,000 loans entered the foreclosure process, which represents a 4.4% month-over-month decline. Total inventory of foreclosures is nearly 2.1 million loans with another 2.2 million loans in the "greater than 90-days delinquent, but not yet in foreclosure" status. While delinquencies remain elevated - currently registering at 2.7 times historical averages - an ever-growing number of new 60-day delinquencies are re-defaults of loans that had previously been 60-days or more delinquent, and had become current.  The number of "first-time" troubled loans, however, remained relatively stable during the last several months.

Other Key Results from LPS' Mortgage Monitor Report:

• Total U.S. loan delinquency rate: 9.29 percent
• Total U.S. foreclosure inventory rate: 3.92 percent
• Total U.S. non-current loan rate: 13.20 percent
• States with most non-current loans: Florida, Nevada, Mississippi, Georgia, and Louisiana
• States with fewest non-current loans: North Dakota, South Dakota, Alaska, Wyoming, Montana

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