Foreclosure starts continued to accelerate in August as Fannie Mae and Freddie Mac enforced more aggressive timelines on early stage delinquencies, loan data aggregator Lender Processing Services Inc. said in releasing its latest monthly loan performance report.
The pace at which seriously delinquent homeowners transition into foreclosure — in many cases after leaving the Home Affordable Modification Program (HAMP) — also continued to pick up, LPS said.
The 282,528 foreclosure starts initiated by lenders in August represented a 29 percent increase from the low for the year, seen in April, and was the highest level since July 2009.
That helped the total number of homes in the foreclosure process grow to 2.04 million, even as the number of delinquent loans not yet in foreclosure eased 7 percent from a year ago, to 4.95 million — the first year-over-year decline since 2006.
All told, LPS estimates that 6.98 million mortgages — 13.02 percent of all outstanding loans — were past due in August, down from 7.32 million at the same time a year ago.
The five states with the highest percentage of non-current loans were Florida (23.5 percent), Nevada (21.3 percent), Mississippi (18.6 percent), Georgia (15.6 percent) and Illinois (14.4 percent).
States with the highest rates of foreclosure starts are also the ones with the highest rates of new, seriously delinquent loans, LPS said.
Top 20 states for non-current loans
|State||% delinquent||% in foreclosure||Total % non-current|
Source: Lender Processing Services
For the last three months, the report showed, Fannie and Freddie’s loan servicers have been ramping up foreclosure starts on borrowers who are behind on their payments by only two months. Foreclosure starts are also up even more sharply among borrowers who are behind by six months or more.
Among all loans in foreclosure, the average number of days delinquent was 478, up from 361 a year ago.