Foreclosure Sale Hike in Judicial States Sparks Inventory Decline

Foreclosure Sale Hike in Judicial States Sparks Inventory Decline

06/06/2013 BY: KRISTA FRANKS BROCK

National foreclosure inventory fell to 3.2 percent in April, its lowest level in four years, according to Lender Processing Services’ Mortgage Monitor report.

The report also revealed a hike in foreclosure sales in judicial states, which stimulated the decline in the national foreclosure inventory.

Foreclosure sales in judicial states jumped 17 percent over the month of April and reached their highest level since 2010 when foreclosure moratoria and process reviews brought the foreclosure process to a near halt across the nation, LPS stated.

However, “[t]he situation is far from resolved,” said Herb Belcher, SVP at LPS.

Despite the month’s increase, foreclosure inventories in judicial states remain seven times higher than levels occurring prior to the foreclosure crisis and are three times the levels seen in non-judicial states.

Belcher also warns, “recently announced moratoria will need to be monitored to determine the impact on timelines, as well as the rate of the improvement trend.”

Mortgage delinquencies nationwide declined 5.81 percent over the month of April. The national delinquency rate now stands at 6.21 percent.

LPS also calculated a 13.4 percent fall in delinquencies from January to April this year. The drop is the largest decline since 2004.

The highest non-current rates (includes delinquencies and foreclosures) are seen among judicial states. In fact, seven of the top 10 states for non-current loans occur in judicial states.

Florida tops the list with a 17.3 percent rate and is followed by New Jersey (15.3 percent), Mississippi (14.5 percent), Nevada (13 percent), New York (12.7 percent), Maine (12 percent).
Foreclosure timelines for judicial and non-judicial states continue to be disparate and are growing, according to LPS. By the time a loan reaches foreclosure sale, it has spent an average of 20.5 months in delinquency in non-judicial states and an average of 33.3 months in judicial states.

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