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.
The 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."