The December Mortgage Monitor
report released by Lender Processing Services and covering performance data for
the full 2012 calendar year, found that while mortgage delinquency rates
remained at elevated levels, they have shown steady improvement, ending the
year 32 percent lower than the January 2010 peak. Additionally, following a
year of regional improvement in foreclosure inventories (marked by stark
contrasts between judicial and non-judicial foreclosure states), the national
foreclosure inventory rate began to decline toward the end of 2012 from
historic highs experienced during the crisis.
In addition to presenting statistics on December delinquency rates and
foreclosures, much of which was previewed earlier this month, The Lender
Processing Services (LPS) Mortgage Monitor looked at several other key issues
including new Qualified Mortgage Rules and changes to servicing regulations.
LPS said that had the Consumer
Finance Protection Bureau's (CFBP) QM rules that were released last week
existed in 2005 at the height of the housing boom they would have restricted at
least 23 percent of loans originated in 2005.
If those rules were in effect in 2012 they would have affected only 2
percent of mortgage originations.
The "refinancible" loan population continues to
grow, even as new originations rise. Leveraging data from the LPS Home
Price index, LPS found that 2012's appreciation in home prices has helped to
improve the U.S. equity situation and create even more refinance
opportunities. Negative equity is down
35 percent since the beginning of the year and nearly 4 million loans that were
below conforming loan-to-value (LTV) thresholds for refinancing last year would
meet those standards today. An
additional 3.4 million loans that are on the cusp of conforming loan-to-value
thresholds stand to benefit, if the home price situation continues to improve.
Home Affordable Refinance Program (HARP) accounted for 1.65 million refinances
in the 12 month period ending in November 2012.
LPS estimates there are another 2.65 million mortgages that could be
refinanced through the program.
Foreclosure starts are increasing but are still impacted by the National Mortgage
Settlement and the CFPB servicing guidelines which prohibit foreclosure starts
before the 120th day of delinquency, restrict dual tracking and require all
other alternatives be considered before foreclosure is initiated.
The total U.S.
foreclosure pre-sale inventory rate in December was 3.44% of all mortgaged
homes in the U.S. The month-over-month
change in foreclosure pre-sale inventory rate was -2.00 %
According to LPS Applied Analytics Senior Vice
President Herb Blecher, 2012 also saw a return to relatively high levels of
mortgage origination activity.
"Though still a long way off from the historic level of originations that
preceded the mortgage crisis, 2012 was the strongest full year of originations
we've seen since 2007," Blecher said. "Volumes were up approximately
34 percent year over year, with about 8.6 million new loans originated. And,
while the majority of these new loans were government-backed - 84 percent in
2012 as compared to just over 50 percent at the peak - the trend over the last
four years does suggest a slowly resurgent non-agency lending market."