The total number of non-current residential mortgage loans fell by 1.4 percent from June to July, to 7.04 million, with improvements in delinquency rates partially offset by an increase in foreclosures, according to mortgage-data aggregator Lender Processing Services.
The latest report from LPS showed non-current loans — representing homes whose owners have missed one or more mortgage payments or who are in foreclosure — down 13.3 percent from January’s high of 8.1 million.
The number of homeowners behind on their loans by 30, 60, or 90 days or more fell 2.8 percent from June to July, to 5.02 million. But the total number of homes in foreclosure was up 2.1 percent, to 2.02 million — the first month-over-month increase since February.
LPS said foreclosure starts were up 24 percent from June to July, to the fourth highest level on record, as Fannie Mae and Freddie Mac continued to ramp up foreclosures on loans that were delinquent by more than six months.
With loan servicers accelerating foreclosure starts on seriously delinquent loans, the number of loans delinquent by 90 days or more declined 4.4 percent from June to July, dripping below the 2.5 million mark for the first time since August 2009.
Although overall delinquency volumes are falling, the number of newly delinquent loans entering the system remains at "historically high levels," LPS noted.
Statistics released by the Mortgage Bankers Association this week showed the number of homes in the foreclosure process during the second quarter dropped for the first time since 2006, but suggested that a surge in newly-delinquent borrowers could drive foreclosure inventory up again.
10 states with the highest share of non-current loans:
1. Florida (23.6 percent)
2. Nevada (21.6 percent)
3. Mississippi (18.4 percent)
4. Georgia (15.6 percent)
5. Arizona (14.6 percent)
6. Illinois (14.5 percent)
7. Ohio (14.4 percent)
8. Indiana (14.3 percent)
9. Louisiana (14.2 percent)
10. Michigan (14.1 percent)
Other states where the percentage of non-current loans exceeded the national average of 13 percent: New Jersey (14.1 percent), Rhode Island (13.7 percent), California (13.5 percent), Tennessee (13.2 percent) and West Virginia (13.1 percent).