Lender Processing Services' August Mortgage Monitor Report

Shows increased foreclosure starts but greater loss mitigation success; mortgage performance is improving, but the foreclosure pipeline remains clogged.

(JACKSONVILLE, Fla.) - Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology and services to the mortgage and real estate industries, announced its release of the August 2009 LPS Mortgage Monitor.

This is an in-depth report of mortgage industry performance indicators based on data collected as of July 31, 2009.

LPS' August Mortgage Monitor showed mixed results from LPS' analysis of the nation's loan inventories. Although total delinquencies remained unchanged from June 2009 at 8.6 percent, the results represented a 40 percent year-over-year increase and remain the highest loan delinquency levels on record.

Foreclosure inventories continued to climb to record highs, with a month-over-month increase of 4.2 percent and a year-over-year increase of 89.6 percent. Since January 2008, jumbo prime, option adjustable-rate mortgages and non-agency conforming prime loans have continued to experience the highest deterioration rates. Jumbo prime foreclosure rates are up 634 percent from January 2008.

LPS reported that the national rate for total non-current loans, which combines delinquencies and foreclosures, edged up slightly over June to 11.6 percent, representing a 50 percent year-over-year increase. Foreclosure starts increased 7.1 percent to their second highest level on record, and the nation's loan deterioration ratio - the number of loans deteriorating versus improving - is approximately 2.2 to 1. Current deterioration rates are highest in the western and northeastern regions of the country.

LPS' Mortgage Monitor showed that the percentage of 90-day or greater delinquent loans rolling to foreclosure status has decreased from 2007 and 2008 levels; however those loans not referred into foreclosure continue to roll to the next stage of delinquency, showing the volume of at-risk loans worsening. Meanwhile, the absolute volume and percentage of foreclosure starts relative to the total number of active loans continues to increase as well.

In more positive news, the redefault rates for loan modifications in the first and second quarters of 2009 are outperforming loan modifications initiated during 2008 in the initial months post modification. Despite this, the report noted that while loan performance is improving, the mortgage market's problems will remain until the nation's sizable foreclosure pipeline is cleared through refinances, loss mitigations or REO sales.

Other key results from LPS' July's Mortgage Monitor include:
Total U.S. loan delinquency rate: 8.6%
Total U.S. foreclosure inventory rate: 3.0%
States with most non-current* loans:
Florida, Nevada, Mississippi, Arizona, California, Georgia, Indiana, Michigan, Ohio and Illinois
States with fewest non-current* loans:
North Dakota, South Dakota, Wyoming, Montana, Alaska, Vermont, Nebraska, Colorado, Oregon and Washington *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. **Totals based on LPS Applied Analytics' loan-level database of mortgage assets. LPS manages the nation's leading repository of loan-level residential mortgage data and performance information from more than 40 million loans across the spectrum of credit products. The company's research experts carefully analyze this data to produce dozens of charts and graphs that reflect trend and point-in-time observations for LPS' monthly Mortgage Monitor Report.