LPS’ August Mortgage Monitor: Data Shows Loan Prepayment Activity Highest Since 2005

Judicial Foreclosure Inventory Near Historic Highs

JACKSONVILLE, Fla. – Oct. 3, 2012 – The August Mortgage Monitor report released by Lender Processing Services (NYSE: LPS) shows a significant increase in prepayment rates in August- a key indicator of refinance activity. In fact, prepayment rates in August rose above those seen in the “mini refinance waves” of both 2009 and 2010, hitting their highest levels since 2005. LPS Applied Analytics Senior Vice President Herb Blecher explains that the impact of this increase has been both pronounced and broad-based.

“Our analysis showed an increase in prepayment activity across the entire combined loan-to-value (CLTV) continuum,” Blecher said. “While those loans with equity, particularly 80 percent CLTV and below, have much higher prepayment speeds, the impact of the Home Affordable Refinance Program (HARP) was also clear. Loans with a CLTV of more than 120 percent saw the greatest uptick – a 65 percent increase for the year to date. However, it is also becoming evident that loans originated in 2007 and earlier have diminished prospects for conventional refinancing opportunities. Fewer than 30 percent of these vintages remain both active and current, and on average, they are marked by larger negative equity positions and lower credit scores. That said, HARP might yet represent a viable refi option for a good portion of this pool.”

Foreclosure inventory in August remained more than eight times the 1995-2005 pre-crisis period, despite national foreclosure inventory dropping to the lowest point since October 2010. The national foreclosure average masks the stark difference between judicial and non-judicial foreclosure states. In judicial states, foreclosure inventory was at a near-record high of 6.49 percent (despite a 14 percent month-over-month increase in judicial state foreclosure sales), as opposed to 2.28 percent in non-judicial states. Overall, foreclosure sales were up 12 percent nationally in August, but remain 33 percent below their September 2010 peak.

Continuing its decline, the inventory of loans 90 or more days delinquent is now almost 50 percent off its January 2010 peak. The bulk of the remaining inventory has now been past due for more than nine months, with a full 43 percent past due for 12 months or more. Still, signs of ongoing modification activity remain in late-stage delinquency, with loans six or more months past due  ?  but not yet in foreclosure  ?  showing the greatest increase in cures from the prior month’s status.

As reported in LPS’ First Look release, other key results from LPS’ latest Mortgage Monitor report include:
Total U.S. loan delinquency rate: 6.87%
Month-over-month change in delinquency rate: -2.30%
Total U.S. foreclosure pre-sale inventory rate: 4.04%
Month-over-month change in foreclosure pre-sale inventory rate: -1.00 %

States with highest percentage of non-current* loans: FL, MS, NJ, NV, NY
States with the lowest percentage of non-current* loans: MT, AK, SD, WY, ND

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Notes: Totals are extrapolated based on LPS Applied Analytics’ loan-level database of mortgage assets.

About the Mortgage Monitor
LPS manages the nation’s leading repository of loan-level residential mortgage data and performance information on nearly 40 million loans across the spectrum of credit products. The company’s research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for LPS’ monthly Mortgage Monitor Report. To review the full report, visit

About Lender Processing Services
Lender Processing Services (NYSE: LPS) delivers comprehensive technology solutions and services, as well as powerful data and analytics, to the nation’s top mortgage lenders, servicers and investors.  As a proven and trusted partner with deep client relationships, LPS offers the only end-to-end suite of solutions that provides major U.S. banks and many federal government agencies the technology and data needed to support mortgage lending and servicing operations, meet unique regulatory and compliance requirements and mitigate risk.

These integrated solutions support origination, servicing, portfolio retention and default servicing. LPS’ servicing solutions include MSP, the industry’s leading loan-servicing platform, which is used to service approximately 50 percent of all U.S. mortgages by dollar volume. The company also provides proprietary data and analytics for the mortgage, real estate and capital markets industries.

LPS is headquartered in Jacksonville, Fla., and employs approximately 8,000 professionals. The company is ranked on the Fortune 1000 as the 877th largest American company in 2012. For more information, please visit

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