Editor’s Note: This item is republished with permission from Inman News. View original article, "Foreclosure inventory remains near all-time high."
The number of U.S. homes in the foreclosure pipeline remained near an all-time high in May with judicial foreclosure states posting inventory levels more than twice that in non-judicial foreclosure states, according to a monthly report from loan data aggregator Lender Processing Services released Monday.
The nation's foreclosure inventory stood at 4.1 percent of all active mortgages in May. This includes all loans that have been referred to an attorney for foreclosure but have not yet finished the foreclosure process through sale.
That percentage doesn't show the "stark contrast" in foreclosure inventories between states that handle foreclosures through the courts and those that don't, said Herb Blecher, LPS Applied Analytics senior vice president, in a statement.
"In the former, 6.5 percent of all loans are in some stage of foreclosure—that's more than 2.5 times the rate in non-judicial states where only 2.5 percent of loans are currently in the foreclosure pipeline," Blecher said.
"Both these figures are significantly higher than the pre-crisis average of 0.5 percent, but it is worth noting that the average year-over-year decline in non-current loans for judicial states is less than one percent, whereas in non-judicial states, it's down 7.1 percent."
More than half, about 53 percent, of loans in foreclosure in judicial foreclosure states have been delinquent for more than two years, compared to just over 30 percent in non-judicial states, LPS said.
Serious delinquencies of 90 days or more, which are not included in foreclosure inventory, made up 3.2 percent of active mortgages in May. Overall, 7.2 percent of active mortgages were delinquent in May, down nearly 10 percent from May 2011.
Foreclosure starts rose 2.9 percent year over year in May, to 202,707. Foreclosure sales stood at 73,439 in May -- far below their September 2010 peak of 124,347. Starts outnumbered sales by almost 3 to 1, LPS said.
Florida, Mississippi, New Jersey, Nevada and Illinois posted the highest shares of non-current loans among states in May. Non-current loans include both delinquent loans and those in the foreclosure process.
As of April, new mortgage loan originations had increased 7.4 percent on an annual basis, to 510,127.
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