Foreclosure Timeline is Lengthening; Seriously Delinquent Increases

The September LPS Mortgage Monitor by Lender Processing Services indicates that foreclosure timeline, ie and the time in delinquency and foreclosure prior to sale increased over the past year from 484 to 624 days on a nationwide basis. The last payment to foreclosure date in judicial foreclosure states has lengthened to 761 days. A non-judicial foreclosure timeline is, on average, transacted six months sooner than a judicial foreclosure.  Almost 40% of delinquent borrowers have not made a mortgage payment in two years; 72% have not made a payment in at least one year.

The foreclosure timeline is so slow in judicial foreclosure states that the percentage of delinquent mortgages has ballooned to 7% of all active loans in these states.  Only 1.6% of foreclosure inventories are moving to sale at any given time in judicial process states.

There were 220,273 foreclosure starts in the month of September, -11% for the month and -15% for the year.

Seriously delinquent loans are increasing at a fast pace giving credence to the possibility that the economy, or at least the housing market, is on a downturn again.  Loans 90 days or more late increased .7% in September to a total of 7.73% of all loans. Of the loans current six months ago 1.6% more are now 60 days late or more.  Serious delinquencies and foreclosures are lower overall for the year (-5.4%) but have been creeping back up over the past couple months.